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96th CONGRESS : : : : 1st SESSION 

JANUARY 15, 1979-JANUARY 3. 1980 



HOUSE DOCUMENTS 



Vol. 10 

MISCELLANEOUS DOCUMENTS 



UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1979 



CONTENTS 



No. 

60. Economic report of the President, Jan. 1979. 

51. National Wilderness Preservation System, 14th annual report. 

52. Establish Department of Education. 

53. Import relief for U.S. wood and plastic clothespin industry. 

54. Supplemental appropriations and budget amendment. 

55. Cumulative report on rescissions and deferrals, Feb. 1979. 

56. Deferrals. 

57. Presidential primary matching payments regulations. 

58. Supplemental appropriations and budget amendments. 

59. Reform of Federal civil justice system. 

60. Social security totalization agreement with Federal Republic of Germany. 

61. Report of Clerk of House, Oct. 1-Dec. 31, 1978. 

m 



96th Congress, 1st Session House Document No. 96-50 

Economic Report 
of the President 







Transmitted to the Congress 
January 1979 



TOGETHER WITH 

THE ANNUAL REPORT 

OF THE 

COUNCIL OF ECONOMIC ADVISERS 



UNITED STATES GOVERNMENT PRINTING OFFICE 
WASHINGTON : 1979 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington, D.C. 20402 

Stock Number 040-000-00399-1 



CONTENTS 



Page 

ECONOMIC REPORT OF THE PRESIDENT 1 

ANNUAL REPORT OF THE COUNCIL OF ECONOMIC 

ADVISERS* 17 

Chapter 1. Progress and Problems in 1978 25 

Chapter 2. Reducing Inflation 54 

Chapter 3. The Economic Outlook 92 

Chapter 4. The World Economy — Managing Interdependence . 135 

Appendix A. Report to the President on the Activities of the 

Council of Economic Advisers During 1978 163 

Appendix B. Statistical Tables Relating to Income, Employ- 
ment, and Production 177 

*For a detailed table of contents of the Council's Report, see page 21. 



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ECONOMIC REPORT 
OF THE PRESIDENT 



ECONOMIC REPORT OF THE PRESIDENT 

To the Congress of the United States: 

Two years ago when I took office our economy was still struggling to 
recover from the deep recession of 1974-75. Unemployment was wide- 
spread, and a substantial part of our industrial capacity stood idle. 

Today 7 million more Americans are at work, and factories across the 
countrv have regained high levels of output. Family incomes, after ad- 
justment for inflation, have risen handsomely and so have business profits. 

The task now confronting us is to manage an economy operating at 
close to its capacity — to sustain prosperity and extend its benefits more 
widely among our citizens. 

Under the best circumstances, designing economic policies to carry out 
that task calls for restraint and careful choices. Developing such policies 
has been made more complex by the acceleration of inflation last year 
and the declining growth of productivity that was partly responsible for 
it. 

My economic and budgetary program deals forthrightly with the eco- 
nomic realities we face today. It is based on four principles. 

First, reducing inflation must be our top economic priority. Inflation 
endangers the gains in employment and income that we have made dur- 
ing the past 2 years. We must act forcefully and effectively to combat in- 
flation, and we must persist until the battle is won. 

Second, government must do its job better. Reducing inflation will 
require budgetary austerity and moderation of economic growth. With 
productivity growth at a low ebb, living standards will not rise as fast as 
they have in the past 2 years. In such a climate, waste, inefficiency, or mis- 
placed priorities are particularly intolerable. It is now more essential 
than ever that our government, in both its budgetary and regulatory 
programs, make the best use of the resources at its disposal and seek 
better, less costly means to achieve our national objectives. 

Third, we will not reduce inflation at the expense of the most vulner- 
able members of our society — the poor, the elderly, and those who have 
difficulty finding jobs even in a high-employment economy. Ours is a 
compassionate Nation, dedicated to a sense of fairness. We will not lose 
sight of those who most need our help. 



Fourth, our policies must reflect the fact that the United States is a 
very important part of a closely related world economy. We will con- 
tinue to pursue domestic policies and undertake other actions as neces- 
sary and appropriate to foster a strong and stable dollar, and we will 
join with other countries to promote an open and growing world 
economy. 

In the months ahead, I will work closely with the Congress to ensure 
that the policies adopted by this government are consistent with these 
four precepts. The budget for 1980 must be very tight, and I intend to 
make sure that a fiscal policy of firm and measured restraint is main- 
tained. But the budget must continue and strengthen our most essential 
programs, and I have supported such programs strongly. In order to 
further the fight against inflation, I will seek prompt adoption of my real 
wage insurance program and my proposals for hospital cost containment 
and regulatory reform. 

I will continue to seek the cooperation and support of the American 
people in the fight against inflation. Last October, I proposed to the 
Nation a program of price and pay standards designed to brake the 
price-wage spiral that has beset our economy for more than a decade. 
This program has received substantial support from the American 
people, and I will make every effort to enlist the broadest possible coop- 
eration with it in the year to come. 

The pay and price standards ask every American to exercise restraint. 
Every American should therefore expect the government to ensure that 
its own actions will contribute to, not undermine, the voluntary effort 
to reduce inflation. Steadfast pursuit of fiscal and monetary discipline 
and limits on the inflationary impacts of other government actions are 
crucial to the success of the anti-inflation program. Together, the actions 
of government and the private sector can lay a new foundation for a dur- 
able prosperity. 

Progress and Problems in 1978 

Among my first actions in office were steps to strengthen economic 
growth and speed the return to a high-employment economy. Those 
actions paid generous dividends. In 1977 our rate of economic growth 
increased by nearly a full percentage point over the prior year, and in 
1978 the Nation's output of goods and services advanced by a healthy 
4*4 percent. Today our Nation is using its industrial capacity more fully 
than a year ago. 

Last year 3 million new jobs were created. A larger proportion of 
our people is at work now than at any other time in our history. Gains 



in employment during the past 2 years have been especially strong 
among women and members of minority groups. 

Unemployment declined to less than 6 percent of the labor force dur- 
ing 1978. Nearly l/ 2 -million fewer Americans were unemployed in De- 
cember 1978 than 2 years earlier. Unemployment among minority 
groups has also begun to decline from the very high levels that persisted 
earlier in the recovery, but these groups still bear a disproportionate 
share of the burden of unemployment. 

Gains in employment and output produced strongly rising incomes 
for most Americans during 1978. Disposable personal income, adjusted 
for inflation, rose by more than 3 percent over the 4 quarters of last year. 
The income of our country's farmers, which was severely depressed in 
1976 and 1977, showed a marked recovery. 

Business profits rose more than 10 percent in 1978, thereby promoting 
conditions for the continued growth in investment needed for productivity 
improvement and healthy economic expansion. Business investment in 
new plant and equipment also strengthened in 1978, raising the pro- 
portion of our national output devoted to capital formation to the 
highest level in 4 years. 

On most counts, the prosperity of our Nation rests on a solid base. 
Our economy at the end of last year was still growing strongly. The 
momentum of expansion will be sustained early this year by the reduc- 
tions in taxes on individual incomes and corporate profits that were pro- 
vided in the Revenue Act of 1978. Last year, as in the earlier years of the 
recovery, the process of economic expansion remained relatively well 
balanced. Business inventories are lean. Industrial firms and financial in- 
stitutions are in good financial condition. Shortages and speculative buy- 
ing generally are absent. But inflation does pose a serious threat to the 
Nation's continued economic health. If we make progress in reducing 
inflation, the prospects are good for a successful transition from a period 
of economic recovery to a period of moderate but sustained growth. 

For more than 10 years, our country, like many other nations, has 
faced stubborn inflation. During the course of 1978 our infla- 
tion problem worsened. Consumer prices rose by about 9 percent, a large 
acceleration from the 6% percent rate of inflation in 1977. Increases in 
wages also were larger and, since productivity gains declined sharply, 
costs of production moved up much more strongly. 

The anti-inflation effort was given top priority in 1978. In May, I rec- 
ommended that the Congress reduce by $5 billion and delay 3 months 
the tax cut that had been proposed earlier. In October, I set forth a strong 



and comprehensive program to combat inflation. Shortly thereafter, in 
cooperation with other countries, the Nation undertook a series of meas- 
ures to strengthen the dollar abroad and further contribute to a reduc- 
tion of inflation at home. 

Inflation in 1978 

Rising inflation last year stemmed from several sources. Cold winter 
weather affected food supplies and prices. Depreciation of the dollar in 
foreign exchange markets added to prices of imports and to prices of 
goods produced by U.S. firms that compete with imported products. 
Cost? of land and building materials were driven up by exuberant de- 
mands for new homes, and the rise of mortgage interest rates added to 
the costs of buying a home. At the same time, the cumulative effects 
of government legislation and regulation over recent years gave further 
impetus to cost pressures. 

A large part of the worsening of inflation last year, however, stemmed 
from poor productivity. Over the past decade or more, the rate of growth 
in our productivity has been slowing. In late 1977 and throughout 1978, 
the slowdown in productivity growth reached serious proportions. Last 
year the productivity of our economy increased by less than 1 percent. 

The reasons for the weakening of productivity growth in our country, 
especially its poor performance last year, are complex and are not fully 
understood. But the consequences are well known. With slower produc- 
tivity growth, our living standards individually and as a Nation cannot 
rise as fast. Slower productivity growth means that the resources avail- 
able for carrying out governmental programs become scarcer. It means 
that large increases in wages and other incomes put greater upward 
pressure on costs and prices. If we ignore the realities of slower produc- 
tivity growth — if governments continue to press forwaid with unabated 
claims on resources, and private citizens continue to demand large gains 
in money incomes — our inflationary problem will worsen. 

Dealing with Inflation 

Inflation injures even person in our country. It means that paychecks 
do not go as far as they once did. It means that savings accumulated for 
retirement or for a child's education become inadequate. Many poor and 
elderly persons see prices they pay for food, shelter, and heat rise rapidly 
while their incomes rise slowly or not at all. These problems are so acute 
that they demand an all-out effort to reduce inflation. Yet rising prices 
and costs have additional and very serious effects on our economy as a 
whole. 



Inflation drives up interest rates. It undermines the competitiveness of 
our industries and the value of our dollar abroad. Confidence of busi- 
nesses in the future is reduced and investment plans are upset. Consum- 
ers' confidence in their own future is sapped. Sooner or later, these effects 
of inflation will undermine the basis for economic expansion and make 
sustained prosperity impossible. 

Finally, the corrosive effects of inflation eat away at the ties that bind 
us together as a people. One of the major tasks of a democratic govern- 
ment is to maintain conditions in which its citizens have a sense of com- 
mand over their own destiny. During an inflation individuals watch in 
frustration as the value of last week's pay increase or last month's larger 
social security check is steadily eroded over the remainder of the year by 
a process that is beyond their individual control. All of us have to plan 
for the future when we lend or borrow, save for a child's education, change 
a job, buy a home, or choose a career. The future is uncertain enough 
in any event, and the outcome of our plans is never fully within our own 
control. When the value of the measuring rod with which we do our 
planning — the purchasing power of the dollar — is subject to large and 
unpredictable shrinkage, one more element of command over our own 
future slips away. It is small wonder that trust in government and in social 
institutions is simultaneously eroded. 

It is for all of these reasons that reducing inflation must now be the 
primary concern of economic policy. 

Policies to Control Inflation 

Firm, sustained and carefully applied fiscal and monetary restraint must 
be the first element in our effort to reduce inflation. We have entered 
a period in which the high rate of economic growth that we experienced 
when the margin of unused resources was larger no longer is appropriate. 
We will apply the needed restraint and stick with it. 

We will not try to wring inflation out of our economic system by pur- 
suing policies designed to bring about a recession. That course of action 
would be unfair. It would put the heaviest burden of fighting inflation 
on those who can least afford to bear it. It also would be ineffective. 
Twice in the past decade inflation has accelerated and a recession has 
followed, but each recession brought only limited relief from inflation. 
The underlying pressures behind rising prices and costs continued to be 
strong, and inflation eventually accelerated again when recovery began. 
Stop-and-go policies do not work. A successful anti-inflation program 
must be durable to deal with a long-run inflation problem. Our program 
meets that test. 

7 



When I announced my anti-inflation initiatives last October, I pledged 
to pursue a restrained budgetary policy in fiscal year 1980. I have kept 
that pledge. The central element of my fiscal program is tight control 
over Federal spending: 

• Growth in Federal spending will be curtailed. As in 1979, Fed- 
eral outlays in the next fiscal year will increase in real terms by 
significantly less than 1 percent. 

• The share of the Nation's output accounted for by Federal spend- 
ing will be reduced to about 21 percent in fiscal 1980, a full year 
ahead of the schedule that I had earlier announced. 

Restricted growth in Federal spending, combined with the revenues 
yielded by a moderately growing economy, will reduce the budget deficit 
to $29 billion in fiscal 1980, less than half its size in the year before I 
took office. This course of fiscal policy will exert the measured restraint 
that is needed. Excessive demands upon the Nation's resources will be 
avoided. Growth in economic activity will slow to a little below the rise 
in the Nation's economic potential. 

These measures of fiscal policy are being complemented by firm and 
careful monetary restraint on the part of the Federal Reserve Board. In 
this way, monetary and fiscal policy are supporting each other to combat 
inflationary pressures and foster a healthy and stable economy. 

Other Governmental Actions 

I am taking other steps to reduce the inflationary effects of govern- 
ment actions. I have directed the agencies of the executive branch to pay 
special attention to ensuring that the regulations they issue do not im- 
pose unnecessary burdens on the public, and I shall continue the efforts 
that got under way in 1978 to improve the regulatory process. 

Last year the deregulation of the airline industry brought American 
consumers the benefits of substantially lower prices and better service. 
This year I intend to seek congressional approval of legislation to increase 
the role of competitive forces in the trucking and railroad industries. I 
will submit to the Congress legislation to reform the process by which 
regulations are developed by Federal agencies, and to increase the empha- 
sis on a careful balancing of costs and benefits. And I am taking steps 
to reduce the burden of paperwork imposed by the government on the 
private sector. 

Government must set a clear example in the fight against inflation. 
For that reason, I ordered last year that the rate of pay increase for Fed- 
eral workers be held to 5.5 percent and that sharp limitations be imposed 
on new Federal hiring. 



Although these actions by government will not, by themselves, bring 
inflation to an end, they are indispensable. They can create an environ- 
ment that encourages voluntary cooperation with the pay and price stand- 
ards. Without restraint by government, the pressures of an overheated 
economy easily could render meaningless the best efforts of businesses and 
workers to reduce price and wage increases. However, it will take broad 
cooperation from the private sector if the voluntary effort is to succeed 
in reducing inflation. 

Voluntary Wage and Price Standards 

The voluntary wage and price standards call for an average rate of 
pay increase of 7 percent or less this year. I also have asked 
businesses to hold their average rate of price increase to at least one-half 
percentage point below the average rate of increase in 1976-77. Where 
such price deceleration is not possible, the standards provide for limita- 
tions on profit margins. 

To meet these standards, both workers and businesses must exercise 
restraint. But they are fair and flexible standards. If they are widely ob- 
served, as I believe they will be, we can reverse the momentum of the 
price-wage cycle and gradually bring down the rate of inflation. 

I recognize that cooperation with this program entails uncertainties 
for workers who comply with the wage standards. They may lose if 
others do not comply, or if forces beyond anyone's control cause prices 
to rise unexpectedly. In order to provide them some assurance that those 
who cooperate will not suffer as a result, and thus to motivate wider 
observance of the standards, I have proposed to the Congress 
a program of real wage insurance. Under this program, if inflation in- 
creases by more than 7 percent this year, groups of workers that meet 
the 7 percent pay standard will receive a tax credit at a rate equal to the 
difference between the actual inflation rate and 7 percent. This credit 
will insure workers' real wages over a range of inflation as high as 10 
percent this year, far higher than is expected to occur. 

The elements of my anti-inflation program are mutually supportive 
and designed to mount a sustainable attack on our long-run inflation 
problem. Voluntary cooperation with the pay and price standards is 
essential to reversing the momentum of inflation. Government needs to 
take strong action to avoid contributing to inflationary pressures in order 
to ensure that the benefits of voluntary restraint are fully realized. To- 
gether, these policies offer our best opportunity to win the fight against 
inflation. 



Outlook for 1979 

My anti-inflation program will support the health of our economy in 
1979 in two respects. First, the rate of inflation should slow this year — 
to about 7/2 percent over the year as a whole, and to somewhat below 
7 percent by the end of the year. Second, moderation of inflation will 
help us avoid a recession and improve the prospects for sustained eco- 
nomic growth in 1980 and beyond. 

Over the 4 quarters of 1979, the Nation's output should rise by about 
2^4 percent, somewhat less than the economy's potential growth. This 
should create an economic climate in which the wage and price standards 
have good propects for success. The labor force will continue to expand 
strongly and most new workers will find jobs. 

Further progress in reducing inflation can be expected in 1980 as the 
effects of the anti-inflation program begin to cumulate. Moderate growth 
in the year ahead, combined with substantial progress against infla- 
tion, will lay the basis for an enduring prosperity. 

In the years beyond 1980, as we are successful in containing the growth 
in Federal spending and bringing down the rate of inflation, we can look 
toward reductions in Federal taxes. Rising real income and inflation, 
even at a reduced pace, push taxpayers into higher tax brackets and 
thereby raise the average effective tax rate. Both to sustain economic 
growth and to relieve citizens from unwarranted tax burdens, tax reduc- 
tions will, from time to time, be highly desirable. 

It would be unwise — and, indeed, very dangerous — to commit our- 
selves now to any mechanical formula for future reductions. No such 
formula will pass the test of budgetary responsibility. Our knowledge of 
future economic conditions and developments affecting the rate of 
inflation is too limited to make such decisions at this time. There is simply 
no substitute for the difficult process of matching our overall budgetary 
policies year by year to the economic requirements of the Nation. 

Policies to Meet the Nation's Needs 

In a period when the overall growth of budgetary resources must 
be tightly restrained, budget decisions take on special importance. Some 
real growth in our defense budget is essential to meet our national security 
needs and keep our international commitments in the face of the grow- 
ing military strength of our potential adversaries. 

Within the domestic budget I have given special priority to the needs 
of the poor and the disadvantaged. I have recommended substantial 
funding for programs that address their needs for assistance in 

10 



health care, education, employment and training, and basic subsistence. 
The 1 980 budget directs the resources of those programs more carefully 
toward those most in need. Similarly I have sought to maintain and, in 
some cases, expand the assistance provided to our financially troubled 
cities and counties. I have paid particular attention to the need to move 
ahead with the development of alternative energy sources, including solar 
energy, and to spur basic research and development, which has been 
lagging in our country. 

We cannot be satisfied with the condition of our economy while many 
of our disadvantaged citizens, especially among minorities, are unable to 
find work even in periods of prosperity. In 1978, the Congress enacted 
with my support the Full Employment and Balanced Growth Act. That 
act restates and amplifies the responsibilities of economic policy that have 
faced our Nation in recent decades. The act challenges us to provide the 
fullest possible opportunities for useful employment, to rely on the private 
sector as the principal provider of jobs, and to create an environment 
of price stability that will make it possible to sustain prosperity. These 
are very ambitious goals that challenge us as a Nation to set our sights 
high. The act also establishes important new procedures for moving 
toward the realization of full employment and price stability. 

Neither can we rest while large numbers of Americans still live in 
poverty. This Nation has made a concerted effort to provide for those 
in our society who are in need. We have assisted the poor to acquire the 
basic necessities of life. We have taken steps to assure adequate incomes 
and medical care for the elderly. And we have helped to assure better 
health care, nutrition, and education for the young. My budget for 1980 
continues to respond to the challenge that poverty sets before our Nation. 

Each of these challenges calls for action by the government. In a 
period of inflation, however, our ability to act is limited. We cannot do 
everything, but we must do what we can and do it well. That is the 
framework within which I have constructed my budgetary program for 
1979 and 1980. This budget provides a carefully balanced spending plan 
which will ensure that the activities of the Federal Government are well 
administered and effective, and that we continue to respond to the im- 
portant needs of the country. 

My 1980 budget provides important building blocks for the future in 
many areas : 

• Health programs, which I have expanded substantially during my 
first 2 years in office, will be maintained at those levels and in some 
cases increased. In addition, consistent with the development of a 

11 



National Health Plan, new resources have been provided for the 
Child Health Assessment Program, which will extend Medicaid 
benefits to over 2 million low-income children. Funds have also been 
provided for extending Medicaid coverage to 100,000 low-income 
pregnant women not now eligible. 

• Authority for new spending for education is maintained at the level 
that I provided in my budget last year. This program will support 
spending nearly 20 percent greater, in real terms, than 2 years ago. 

• Publicly assisted housing will be provided through subsidies for 
325,000 new units for families with low or moderate incomes. 

• Job-related programs will include funds that will support an average 
of 546,000 public service jobs, phasing down to 467,000 jobs by the 
end of 1980. These jobs have been targeted more tightly to serve the 
structurally unemployed. Another 424,000 training opportunities 
also will be provided for the structurally unemployed. Programs to 
provide employment and training opportunities for youths remain 
a high priority. More private sector job opportunities will be made 
available through the new private sector initiative and the targeted 
employment tax credit. 

• A welfare reform program, to take effect in 1982, will expand aid 
to families with dependent children, increase the earned income tax 
credit for low-wage workers, substantially improve employment op- 
portunities for the Nation's neediest citizens, and provide fiscal 
relief to State and local governments with severe welfare burdens. 
Important reforms in the administration of the program will make 
America's welfare system easier to operate. 

• Aid to our cities and counties will continue to be provided through 
revenue sharing, community development block grants, urban mass 
transit assistance, and urban development action grants. My budget 
provides new resources for the National Development Bank and 
requests funding in fiscal 1979 and 1980 for a new program of 
special fiscal assistance to cities and counties with severe unemploy- 
ment problems. 

This spending program provides for our Nation's vital needs, while 
remaining within the constraints required by today's inflationary 
economy. 

The International Economy 

Developments last year reminded us once again of the interdependence 
of our economy and those of other nations around the world. Our trading 
partners are looking at our ability to deal with our economic problems at 
home as an indicator of the strength and leadership they can expect from 
the United States. We will not disappoint them. 

12 



Nineteen hundred and seventy-eight was a year of significant progress 
in the world economy. Real output began to pick up in industrial coun- 
tries other than the United States. Important initiatives in the inter- 
national arena occurred in trade policy, in balance of payments ad- 
justment, and in financial markets — all influenced by the cooperation 
shown at the Bonn Summit. 

Late 1978 and early 1979 will mark the culmination of the Tokyo 
round of Multilateral Trade Negotiations. These historic negotiations — 
which began in 1975 and were intensified in 1977 — should lead to the 
first comprehensive overhaul of the rules of international trade since the 
1960s. 

The need for a revamping of the trading system is clear. Our large 
foreign trade deficit stems in part from a loss of American vitality in 
world markets. But it has also resulted from the tariff and nontariff 
barriers of our trading partners. Over the coming years, under a final 
multilateral trade agreement, barriers at home and abroad will be recip- 
rocally dismantled. 

During 1979 I will be working closely with the Congress to adopt 
the final multilateral trade agreement, along with implementing legis- 
lation, that will foster robust export growth and free and fair competition 
in world trade under rules that are both equitable and economically 
sensible. These measures will provide a framework for trade that will 
enhance our living standards in the decade to come. 

In recent years, the United States has had a serious balance of pay- 
ments deficit. Our imports surged as we grew rapidly and drew heavily 
on imported oil. Our exports lagged because of slow economic growth 
abroad. These factors contributed to a trade deficit rising from about 
$10 billion in 1976 to an annual rate of almost $45 billion in early 
1978. As a result of the sharp increase in our external deficit and the 
acceleration of inflation in the United States, the value of the dollar in 
foreign exchange markets fell substantially last year. 

We have taken important steps to correct the deficit : 

• In late 1978, Congress enacted the National Energy Act, the first 
comprehensive legislation for dealing with our energy problems. 
The effect will be to reduce our oil imports in 1985 bv 2.5 million 
barrels per day. 

• In 1978, I announced the first phase of a National Export Policy. 
By setting up a framework to increase support for exports and re- 
duce disincentives to export, we can begin to increase our share of 
world commerce. Fundamental improvement in our trade position 
is critical to a healthy dollar. 

13 



• A strong and effective anti-inflation program has been put into 
place. An integral part of that program consists of monetary and 
fiscal policies that will moderate the rate of economic expansion. 
These actions will help reduce our large foreign trade deficit. 

These policies were beginning to bear fruit by the end of 1978. Ex- 
ports today are growing more rapidly than the domestic economy. The 
merchandise trade deficit declined from a $38-billion annual rate in the 
first half of last year to about $32 billion in the latter half of the year. Nar- 
rowing of the deficit should continue and we foresee a marked improve- 
ment in the more comprehensive current account measure. 

Nineteen hundred and seventy-eight was also a year of unusual in- 
stability in international financial markets. In the fall, movements in 
the exchange value of the dollar became very disorderly, and its decline 
became clearly excessive. 

On November 1 , I announced a series of steps to restore order to the 
foreign exchange markets and to correct the excessive decline of the 
dollar. Up to $30 billion in foreign exchange resources were assembled 
by the United States, to be used in coordination with other countries 
utilizing their own resources, to protect the dollar's value in currency 
markets. Domestic interest rates were raised significantly to help reduce 
inflation and strengthen the dollar in exchange markets. And the United 
States underlined its commitment to deal with its inflation problem and 
strengthen its underlying economic position. 

These actions have improved the tone of the exchange markets and 
contributed to a rise in the value of the dollar. More importantly for 
the longer term, they are helping to create more stable conditions in the 
exchange markets, in which the value of the dollar can better reflect the 
fundamental strength of the U.S. economy. 

Progress also was made in 1978 in achieving closer economic coopera- 
tion among the leading industrial nations. I met in Bonn with the leaders 
of the six major industrial countries to discuss major economic problems 
facing us. Out of this came a concerted action program to restore greater 
balance and confidence in the international economy and in world fi- 
nancial markets. Together, we took the necessary steps to achieve those 
ends — the United States committed itself to combat inflation and reduce 
oil imports, Germany and Japan to increase growth and reduce trade 
surpluses, others to take measures on trade or inflation. Only through 
continued economic cooperation and sound policies can we attain the 
goal of full employment and price stability that is our ultimate objective. 

14 



Building for the Future 

During this coming year, we as a Nation have an opportunity to 
strengthen our economy and lay the basis for continuing prosperity. The 
gains of the last 2 years have been notable. We have made great progress 
at home in recovering from the recession, and we have strengthened the 
stature of the United States in the world economy. In the year ahead, we 
can secure and extend those gains by working together to moderate infla- 
tion. I am confident that we will rise to the challenge. 




January 25, 1979 



15 



THE ANNUAL REPORT 

OF THE 

COUNCIL OF ECONOMIC ADVISERS 



LETTER OF TRANSMITTAL 

Council of Economic Advisers, 

Washington, D.C., January 24, 1979. 
Mr. President: 

The Council of Economic Advisers herewith submits its 1979 Annual 
Report in accordance with the provisions of the Employment Act of 1946 as 
amended by the Full Employment and Balanced Growth Act of 1978. 
Cordially, 



^^^c^ea ^ )scJu>c£fyz> 



Charles L. Schultze 
Chairman 



V T.vIp F, Ornmlev fi 



U/xiAaso<a>v^ l/UnU^t^cu<i 



William Nordhaus 



19 



CONTENTS 



Page 

Chapter 1. Progress and Problems in 1978 25 

An Overview of the Year 25 

The Major Sectors of Aggregate Demand in 1978 29 

Personal Consumption Expenditures 29 

Housing 31 

Business Fixed Investment 32 

Net Exports 33 

Inventory Accumulation 34 

Government Spending 34 

Labor Market Developments 36 

Prices and Wages in 1978 38 

Food Prices in 1978 40 

Depreciation of the Dollar 42 

Housing Costs 43 

Medical Care 45 

Aggregate Demand Management in 1978 45 

Fiscal Policy 46 

Monetary Policy 48 

Credit Flows in 1978 52 

Chapter 2. Reducing Inflation 54 

The 1978 Acceleration of Inflation 54 

Inflation in 1978 56 

Explaining the 1978 Inflation 58 

Causes of Wage Acceleration 66 

The Productivity Slowdown 67 

Potential GNP 72 

Economic Policy in an Inflationary Environment 76 

Aggregate Demand Policy 77 

Standards for Wage and Price Behavior 80 

Regulatory Policy 85 

Chapter 3. The Economic Outlook 92 

The Economy in 1979 and 1980 92 

Fiscal Policy for 1979 and 1980 93 

Monetary Policy 94 

The Economic Forecast 97 

Price and Wage Developments 104 

21 



Chapter 3. The Economic Outlook — Continued Page 

Economic Objectives and Policy for the Longer Run 106 

The Humphrey-Hawkins Act 107 

Goals for the Economy to 1983 108 

Requirements to Achieve the Economic Goals 1 10 

Attaining the Goals for Unemployment and Inflation. ... 117 

Summary 123 

Investment Policy Report 124 

Postwar Trends in Investment and Capital Formation. . . 124 

Investment Incentives 127 

Research and Development 132 

The Supply of Investment Capital 132 

Small Businesses 134 

Chapter 4. The World Economy — Managing Interdependence. 135 

The Global Economy: Developments and Prospects 137 

Growth and Inflation 139 

Prospects 143 

Current Account Developments and Prospects 143 

International Financial Developments 147 

The Operation of Flexible Exchange Rates 148 

Important 1978 Developments 153 

The November 1 Initiative 155 

The European Monetary System 156 

The Changing Environment of World Trade 157 

The Multilateral Trade Negotiations 1 58 

U.S. Domestic Trade Policy 160 

The National Export Policy 160 

Appendixes: 

A. Report to the President on the Activities of the Council 

of Economic Advisers During 1978 163 

B. Statistical Tables Relating to Income, Employment, and 

Production 177 

List of Tables and Charts 

Tables 

1 . Shares of National Income, 1959-78 27 

2. Growth in the Major Components of Real Gross National 

Product, 1975-78 29 

3. Changes in Real Business Fixed Investment, 1975-78 32 

4. Unemployment Rate and Growth in Employment and Labor 

Force, by Demographic Gioup, 1978 38 

5. Alternative Measures of Inflation, 1976-78 39 

6. Measures of Wage Rates and Costs, 1973-78 39 

7. Changes in Prices, Costs, and Profits, Per Unit of Output, 

Private Nonfinancial Corporate Sector, 1973-78 40 

22 



List of Tables and Charts — Continued 
Tables Page 

8. Changes in Retail Food Prices, 1977-78 40 

9. Changes in Currency Values and Consumer Prices, by Country, 

Third Quarter 1977 to Third Quarter 1978 43 

10. Actual and High-Employment Federal Receipts and Ex- 

penditures, National Income and Product Accounts, Calen- 
dar Years 1973-78 46 

1 1 . Federal Unified Budget Outlays as Percent of Gross National 

Product, and Budget Surplus or Deficit, Fiscal Years 1955-80 . 48 

12. Annual Rate of Change in Selected Consumer and Producer 

Prices and Employment Costs, 1960-78 56 

13. Selected Measures of the Rate of Wage Increase, Private 

Nonfarm Economy, 1976-78 61 

14. Mean Wage and Benefit Adjustments in Major Collective 

Bargaining Agreements, 1976-78 62 

15. Labor Productivity Growth, 1948-78 68 

16. Productivity Growth by Industry, 1950-77 71 

17. Potential Gross National Product and Benchmark Unemploy- 

ment Rate, 1973-78 75 

18. Estimated Annual Budgetary Cost of Real Wage Insurance 

Proposal 84 

19. Cyclical Contractions in Mortgage Credit and Housing Starts, 

1959-74 95 

20. Growth in Deposits, 1977-78 96 

21. Economic Outlook for 1979 97 

22. Economic Goals, 1979-83 109 

23. Net Saving by Sector; 1973 and 1975 112 

24. Federal Unified Budget Receipts and Outlays Under Current 

Policy Budget, Fiscal Years 1979-83 114 

25. Private Net Saving and Investment and the Unemployment 

Rate, 1952-80 115 

26. Saving Rate and Population Growth, by Age of Household 

Head 116 

27. Selected Unemployment Rates, Fourth Quarter 1972 and 

Fourth Quarter 1978 118 

28. Real Nonresidential Fixed Investment as Percent of Real 

Gross Domestic Product, 1966—76 126 

29. Capital Expenditures by Business for Pollution Abatement, by 

Industry, 1976-78 127 

30. Determinants of Business Fixed Investment, 1955-78 128 

31. Annual Growth in Real GNP in the United States and Other 

Major Industrial Countries, 1960-79 139 

32. Annual Growth in Real GNP in Major Industrial Countries, 

1960-78 139 

23 



List of Tables and Charts — Continued 
Tables Page 

33. Annual Growth in GNP Per Employed Worker in Major 

Industrial Countries, 1964-78 140 

34. Changes in Consumer Prices in Major Industrial Countries, 

1976-78 141 

35. World Current Account Balance, 1975-78 144 

36. Current Account Balances for Selected Major Industrial 

Countries, 1976-78 145 

Chans 

1 . Selected Interest Rates and Bond Yields 49 

2. Unit Labor Costs and Deflator, Nonfarm Business 57 

3. Capacity Utilization Rates 59 

4. Unfilled Orders-Shipments Ratio, Durable Goods Manu- 

facturing 60 

5. Selected Unemployment Rates 64 

6. New Hire and Quit Rates in Manufacturing 65 

7. Actual and Potential Gross National Product 75 

8. Real Nonresidential Fixed Investment as Percent of Real 

GNP 125 

9. Unemployment in the U.S. and Five Major Industrial 

Countries 137 

10. Consumer Price Inflation Rate in the U.S. and Six Major 

Industrial Countries 1 38 

11. Weighted-Average Exchange Value of the U.S. Dollar 151 

12. Monthly Average of Daily Exchange Rate Changes 153 

13. U.S. Share of Fifteen Industrial Countries' Exports of Manu- 

factured Goods 161 



24 



CHAPTER 1 

Progress and Problems in 1978 

THE U.S. ECONOMY LAST YEAR maintained substantial momen- 
tum in its fourth year of expansion. Output and employment rose and 
unemployment fell. But the year was marred by a serious acceleration in the 
rate of inflation and a decline in the value of the dollar that was sharper than 
fundamental economic conditions warranted. Although economic growth 
slowed from 5/2 percent over the 4 quarters of 1977 to 4J4 percent during 
1978, real income rose in all sectors, and all demographic groups experienced 
employment gains. A reasonable balance was maintained among sectors of 
real spending. Business fixed investment grew vigorously and residential con- 
struction remained strong despite sharply rising interest rates. 

During the years immediately preceding 1978, the rapid growth asso- 
ciated with economic recovery had absorbed many of the capital and labor 
resources idled by the 1974—75 recession. Thus it became appropriate that 
growth should slow to a pace more in line with the long-term potential of 
the economy. The decline in the growth rate during 1978 was the first step 
in that transition. 

Much remains to be done to provide adequate employment opportuni- 
ties for those who cannot find jobs even in a high-employment economy. 
This task cannot be accomplished solely through aggregate demand policy, 
however, without risking further acceleration of inflation. Aggregate de- 
mand management must now aim at a more moderate rate of economic 
expansion to combat inflation while structural measures are developed to 
attack remaining pockets of unemployment. 

AN OVERVIEW OF THE YEAR 

The quarterly pattern of growth during the year was once again uneven. 
Unusually severe winter weather and a major strike in coal mining reduced 
output growth to zero in the first quarter. Both consumer spending and 
construction activity were curtailed by the adverse weather. In the second 
quarter, both of these sectors rebounded strongly, and virtually all of the 
sales and production lost in the first quarter were regained. Taking a 2- 
quarter average, real gross national product (GNP) rose at a 4*4 percent 
annual rate in the first half of the year. In the second half of the year, 
there was again substantial disparity between the 2 quarters. Growth slowed 

25 



in the third quarter and accelerated in the final quarter. Over the 2 quarters 
together the annual rate of growth of real GNP averaged 4*4 percent, the 
same as for the first half. 

The increase in employment over the 4 quarters of last year was slightly 
less than in 1977 — 3.3 million compared to 3.9 million. It remained very 
large by historical standards, however, as the growth of productivity slowed 
significantly. The unemployment rate continued the marked decline begun 
in the latter part of 1977, falling from 6.6 percent in the fourth quarter of 
1977 to 5.8 percent by the final quarter of 1978. 

All sectors achieved further increases in real income in 1978. Aside from 
the farm sector, however, the gains were more modest than in the previous 
3 years of stronger fiscal stimulus and rapid recovery in real output. The 
growth of real per capita disposable income, for example, slowed from 4.6 
percent in 1977 — a year when personal income taxes were reduced — to 2.5 
percent over the 4 quarters of 1978. During the 3 years since the first year of 
cyclical recovery from the 1974-75 recession, the growth rate has averaged 
3.2 percent, slightly above the 2/2 percent trend for the two decades from 
1953 through 1973. Corporate profits, in 1972 dollars, rose moderately fur- 
ther in 1978, following larger gains earlier in the recovery. Rising capacity 
utilization has lifted real profits at an average annual rate of 18 percent since 
the cyclical low in 1975. Both the rise in capacity utilization and the improve- 
ment in profitability helped to spur a recovery of business capital investment 
to a 10 percent share of GNP. 

Farm income is, of course, less sensitive to fluctuations in overall eco- 
nomic growth but very sensitive to other factors such as weather, foreign 
demand, and agricultural policy. Farm income rose to an exceptionally 
high peak in 1973-74 from which it drifted down until 1977. A sharp 
recovery occurred last year, with farm proprietors' income reaching $25.1 
billion for the year as a whole (national income and product accounts basis) . 
In 1972 dollars, farm income in 1978 was $16.5 billion, or 14 percent higher 
than a year earlier. 

The division of income among employee compensation and other shares 
has remained relatively constant during the most recent 3 years of ex- 
pansion, as shown in Table 1. The share received by employees as wages 
and fringe benefits has risen slightly from the earlier part of the decade 
and is up substantially from the 1960s. The corporate profits share has 
improved significantly from recession lows although it remains well below 
the high level of the preceding decade. 

One of the most discouraging developments of 1978 was the very slow 
growth of productivity. Output per hour in the private nonfarm business 
sector grew by only three- fourths of 1 percent during the year. ( The reasons 
are explored in Chapter 2.) Weakness in productivity growth did much to 
exacerbate inflation. Since increases in nominal wage costs were offset to a 
lesser degree by productivity gains, unit labor costs rose more rapidly than 
was anticipated, and prices were pushed up faster. Furthermore, labor de- 

26 



Table 1. — Shares of national income, 1959-78 
[Percent! 



Item 


1959-68 
average 


1969-73 
average 


1974-78 
average ' 


1976 


1977 


1978' 


Compensation of employees 


71.2 

2.3 
8.1 
12.3 

6.1 


75.3 

2.0 
6.2 
9.4 
7.0 


76.5 

1.6 
5.2 
8.8 
7.9 


76.3 

1.4 
5.2 
9.3 
7.9 


76.1 

1.3 
5.2 
9.5 
7.8 


76.4 


Proprietors' income:' 

Farm 


1.5 




5.2 


Corporate profits 2 . 


9.4 


Other' 


7.6 







1 Preliminary. 

2 With inventory valuation and capital consumption adjustments. 

• Rental income of perscns (with capital consumption adjustment) and net interest. 

Note. — Detail may not add to 100 percent because of rounding. 
Source: Department of Commerce, Bureau of Economic Analysis. 

mand strengthened more rapidly than it would have done if productivity 
growth had been better, and this may have been a factor in the acceleration 
in hourly earnings early in the year. 

Unlike earlier years of the recover), when price indexes excluding food 
and energy rose at a fairly steady rate of around 6 to 6/2 percent, 1978 wit- 
nessed a pervasive acceleration of prices and labor compensation. Com- 
pensation per hour in the fourth quarter of last year was almost 10 per- 
cent higher than a year earlier, in contrast to the 8 to 8/2 percent rate of in- 
crease during the preceding 3 years. And price increases were larger in 1978 
than in earlier years for almost all categories of goods and services. The GNP 
deflator increased 8.3 percent over the 4 quarters of 1978, compared to 6.1 
percent in 1977. The consumer price index (CPI) rose by 9.2 percent over 
the 12 months ending in November compared with 6.8 percent in 1977. This 
more rapid rise of prices, especially consumer prices, was attribuable not only 
to poor productivity performance but also to adverse developments in par- 
ticular markets. 

Food prices rose sharply, since supplies of red meats were even more lim- 
ited than had been expected and adverse weather damaged fruit and 
vegetable crops. Moreover, the substantial depreciation of the dollar in inter- 
national exchange markets was accompanied by higher prices of imports and 
of competing domestic products. 

In view of the worsening of inflation, the Administration in May post- 
poned the effective date for its proposed tax reduction from October 1978 
to January 1979 and reduced the proposed cut from $25 billion to about 
$20 billion. Growth in Federal outlays was also slower than had been esti- 
mated. For fiscal 1978, unified budget outlays were $12^2 billion below the 
estimate contained in last January's budget, and the estimate for fiscal 1979 
has been revised down by $7.6 billion. Real purchases of goods and services 
by all levels of government rose 2 percent over the 4 quarters of 1978, in con- 
trast to the 3% to 4^4 percent that had been anticipated at this time last year. 

27 



Both domestic and international conditions in 1978 also prompted a more 
restrictive monetary policy. The Federal funds rate increased from 6J/2 per- 
cent to about 10 percent during the year. Other short-term interest rates 
rose commensurately. As is typical, long-term rates rose less than those on 
short-term securities. 

Tightening fiscal and monetary policies were one cause of the slower 
economic growth in 1978 than in 1977. The postponement of the tax cut and 
slower growth of Federal purchases contributed to a more moderate rise in 
consumer incomes and expenditures during 1978 than had been foreseen a 
year earlier. The inflation itself also played a part in slowing growth. In- 
creases in food and import prices siphoned purchasing power away from most 
domestic consumers. 

The largest single reason for the slower growth in 1978 than in 1977 was 
the leveling out of residential construction after a prolonged rise in housing 
starts beginning early in 1975. This leveling may have been partly the result 
of the increased restraint that developed in financial markets over the year. 
The more important influences were probably a filling of backlogs of demand 
and the fact that the home-building industry was operating at nearly full 
capacity. 

The economy at the end of 1978 still showed substantial momentum, but 
the serious inflation problem and its interaction with the international value 
of the dollar have created a marked degree of uncertainty. Nominal interest 
rates are approaching historically high levels, to some extent as a result of the 
necessary steps taken at the beginning of November as part of the dollar sup- 
port package. Financial restraint has not yet had significant adverse effects 
on spending, but it is difficult to predict how consumers and businesses will 
respond to rising interest rates in the current environment. Furthermore, the 
continuation of inflation casts a shadow on the economic horizon. Com- 
pliance with the anti-inflation program announced by the President in Octo- 
ber is fundamental to maintaining a strong economy. This program is 
discussed in detail in Chapter 2. 

If success is achieved in containing inflation this year, the prospects are 
favorable for maintaining a satisfactory growth rate and avoiding a reces- 
sion. There are no major imbalances plaguing us. Capacity bottlenecks are 
relatively rare ; capacity has been growing at a sustainable pace ; inventories 
in most lines of business are reasonably balanced with sales; and liquidity 
positions, although declining, are not severely strained. The international 
trade position has been improving. 

Continued strength in the near term seems assured. Employment and 
output rose strongly in the fourth quarter. Orders for durable goods have 
increased substantially. And the January 1 tax cut will help to sustain con- 
sumer spending early in the year. But the outlook for the latter part of 1979 
will depend heavily on moderating inflation and on careful coordination 
between fiscal and monetary policies. 

28 



THE MAJOR SECTORS OF AGGREGATE DEMAND IN 1978 



Private demand sustained the economic expansion through its fourth 
year. The continued strength of business fixed investment last year was a 
notable aspect of the composition of demand (Table 2). Housing starts 
demonstrated remarkable resilience; despite tightening credit conditions 
they remained near the high level that had been reached at the end of 1977. 
Consumption expenditures grew somewhat faster than disposable income 
during the year, and the saving rate declined from its already relatively low 
level at the end of 1977. In contrast, growth in State and local spending over 
the 4 quarters of 1978 was at a slower pace than in 1977; the effects of the 
1977 economic stimulus measures — many channeled through the State and 
local sector — gradually diminished. Federal purchases in real terms declined 
slightly due to a variety of special factors. 

Table 2.— -Growth in the major components of real gross national product, 

1975-78 
[Percent change, seasonally adjusted annual rate) 



Component 



Gross national product 

Personal consumption expenditures 

Nonresidential fixed investment... 

Residential investment 

Government purchases: 

Federal 

State and local 

Domestic final sales 3 



1975 IV 
to 

1976 IV 



4.6 

5.7 

8.6 

23.6 

.2 

-2.7 

5.0 



1976 IV 
to 

1977 1V 



1977 IV 
to 

1978 IV i 



5.5 

4.8 
9.1 
15.3 

6.3 
4.3 

5.7 



4.3 



3.8 
8.3 



-.3 
3.5 



3.7 



1977 IV 

to 
197811 



4.2 

2.2 
12.4 
-1.3 

-12.2 
4.6 

2.2 



197811 

to 
1978 IV ' 



4.3 

5.4 
4.3 
-.3 

13.2 
2.3 

5.2 



1 Preliminary. 



1 rrenminary. 

2 Largely attributable to fluctuations in Commodity Credit Corporation expenditures. 

3 Gross national product excluding change in business inventories and net exports of goods and services. 

Source: Department of Commerce, Bureau of Economic Analysis. 



PERSONAL CONSUMPTION EXPENDITURES 

Personal consumption is typically a major source of stimulus in the early 
stages of recovery. The current expansion is no exception. Between mid- 1975 
and the end of 1976 the personal saving rate declined substantially, and the 
fraction of disposable income spent on durable goods rose. Consumption 
subsequently became a less important source of stimulus, but it remained 
an expansionary factor in 1978. The increase in consumption came to 3.8 
percent in real terms during the last year, one-half percentage point more 
than the increase in real disposable income. 

Since 1975 the household sector has significantly increased its stocks of 
durable goods. In the process, outstanding consumer debt rose enough 
to lift the ratio of debt repayments to disposable income from a 1975 
low of 15.6 percent to 16.8 percent at the end of 1977. It is therefore not 
surprising that the rate of growth of spending (in 1972 dollars) for durable 
goods declined substantially to 5.0 percent in 1978, compared to 11.3 per- 



29 



cent in 1977. Nonetheless, durable goods purchases in real terms held at 
about 15 percent of real disposable income, the level reached late in 1977. 
Auto sales remained at a high rate of 1 1 */4 million units a year but did not 
rise further. Despite steep price increases for foreign cars, the foreign car 
share of the new car market declined relatively little during the year. 

With durable goods sales remaining comparatively high, the volume of 
outstanding consumer installment credit rose substantially further in 1978; 
during the year the net increase amounted to $44 billion. In the fourth quar- 
ter, repayments of consumer installment debt had reached 17.7 percent of 
disposable personal income, four-tenths of a percentage point above the 1971 
peak (the earliest available data for the present series). Total repayments, 
including mortgage repayments, amounted to almost 23 percent of disposable 
income in the third quarter. 

The high fraction of consumers' income absorbed by debt repayment 
has created some concern that a downturn in consumer demand might 
ensue. Survey data on the use of consumer installment credit suggests, how- 
ever, that the increase in the ratios of installment credit extensions and re- 
payments to disposable income may have been due to rapid growth in the 
number of households in the age bracket associated with relatively heavy 
credit usage. Rapid growth has occurred in the number of young adults in 
the 18- to 34-year age bracket; this group uses credit the most heavily. 
An absence of excessive debt burdens is also suggested by the fact that 
delinquency rates on installment loans did not rise during the year. 

At the start of last year the Administration forecast a rise of real consump- 
tion of about 41/2 percent, measured fourth quarter to fourth quarter, or 
about three-fourths percentage point more than the 3.8 percent actually 
realized. The reason for this difference was slower growth of real disposable 
income. This slowdown, in turn, is partly explained by the postponement of 
the effective date of the proposed tax cut from October 1, 1978, to January 1, 
1979. A more important cause, however, was the increase in the rate of infla- 
tion that occurred during the course of 1978. Effective tax rates were in- 
creased as households were moved into higher tax brackets. Furthermore, 
the 1 1 percent rise in food prices reduced the growth of real incomes for 
most consumers, as did the price increases associated with the decline of the 
dollar's value in foreign exchange markets. 

In the past, sharp unexpected increases in the rate of inflation have 
increased the personal saving rate. Inflation generally tends to raise the cost 
of borrowing and curtail the growth of real wealth. In addition, consumers 
may become less confident of their future prospects. In contrast, the saving 
rate declined in 1978. The continued strength of consumer expenditures in 
the face of high actual inflation rates and rising nominal interest rates may to 
some extent have stemmed from anticipatory buying in advance of expected 
price increases. Evidence from surveys suggests that some consumers con- 
sidered the present time to be propitious for buying because they expected 

30 



prices to rise further. This may have helped sustain the already high level of 
durable goods purchases. 

Relative price changes appear to have contributed to changes in the 
composition of consumption during 1978. For example, real purchases of 
transportation services and clothing and shoes rose more sharply than 
total consumption. In these areas, price increases were below the average 
for all consumer goods and services. A shift in the composition of food con- 
sumption, as a result of the rapid rise in food prices, was probably the major 
reason for the decline in the measured real value of food consumption. 
Whenever food prices rise steeply consumers tend to shift toward less costly 
foods, although they do not necessarily eat smaller quantities of food. For 
example, the sharp reduction in supply and sharp increase in the price of red 
meats generated a significant shift of consumption to poultry and dairy 
products. 

HOUSING 

Housing activity remained on a plateau throughout last year, following 
nearly 3 years of steady advance. Real residential construction, on a 
calendar year basis, was 3.5 percent above that in 1977, and there were 2.0 
million housing starts last year. The number of single-family starts was 
just below the l/a-million record level of 1977, while multiunit starts 
rose to 592,000. Over the 4 quarters of 1978, however, residential con- 
struction in real terms declined slightly, in contrast to a rise of 15 percent 
in the previous 4 quarters. This flattening out of residential investment 
outlays was a dominant element in the slower growth of real GNP in 1978. 

In the first quarter, housing starts fell about 20 percent as a result of 
the inclement winter in the North Central and Northeast regions. The 
shortfall was largely made up in the second quarter; then housing starts 
leveled out at an annual rate of around 2 million units. 

This leveling of housing starts and residential construction in 1978 was 
not surprising. Three years of strongly rising building activity had filled 
backlogs of demand created by the depressed level of new construction 
during the 1973-74 period of credit restraint and low income. Moreover, 
the sharp rise in prices of a wide range of building materials suggests that 
the building industry was operating at close to capacity in 1978. Indeed, 
the striking feature of the housing sector last year was its continued high 
level of activity in the face of sharply rising interest rates. 

The resilience of housing in a year of tightening financial markets is 
largely attributable to the ability of specialized mortgage lenders to compete 
more effectively for savings. Beginning in June, new regulations permitted 
commercial banks and thrift institutions to issue 6-month certificates of 
deposit on which rates paid are tied to those on 6-month Treasury bills. These 
new money market certificates sustained the supply of mortgage credit, but 
they did not prevent interest rates on mortgages from rising along with 
other rates. The national average effective mortgage rate for new houses 

31 



reached 10 percent by the end of the year. The strength of demand, particu- 
larly for single-family units, in the face of such high mortgage interest rates 
results partly from the large number of people who were born in the baby 
boom of 1946-57 and are now reaching age brackets where the rate of home- 
ownership is traditionally high. Demand may also be stimulated by the 
expectation that houses will coniinue to be a good inflation hedge. Over 
the past 7 years purchase prices for new homes, adjusted for changes in 
quality and size, have risen at an annual rate about one-third faster than 
other prices. The tax deductibility of mortgage interest and the favorable 
tax treatment of capital gains from home sales add to the attractiveness of 
such investment. 

Multifamily housing starts rose 2.9 percent in 1978. They were still 
about 400,000 below the 1972 peak of 1 million, which included close 
to 200,000 publicly subsidized starts. The number of subsidized starts last 
year was almost 165,000, up substantially from the lows of 1975 and 1976. 
For all rental housing the vacancy rate remained close to 5 percent through 
the third quarter of last year, a historically low figure. Rents rose 7.3 
percent, almost 1 percentage point more than in 1977. This probably con- 
tributed to an improvement in profits and helped to stimulate multiunit 
building. 

BUSINESS FIXED INVESTMENT 

A year ago there was widespread concern that business fixed investment 
was not demonstrating its usual cyclical response to improvement in such 
basic determinants as the rate of growth of output, business pre fits and cash 
flow, and the cost of capital. In fact, revised data for 1977 that became avail- 
able last July showed a much stronger rise of investment than had appeared 
earlier, and growth last year continued to be relatively strong. The rate of 
real growth of business fixed investment over the 4 quarters of last year 
was 8.3 percent (Table 3). For the year as a whole investment rose to 10 
percent of GNP, close to its share in the high investment periods of the 1960s 
and early 1970s. 

Investment in structures, which had been disturbingly weak earlier in 
the recovery, climbed 12.7 percent in 1978, and by year-end it ex- 



Table 3. — Changes in real business fixed investment, 1975-78 
[Percent chanpe, fourth quarter to fourth quarter! 



Component 


1975 


1976 


1977 


1978' 


Nonresidential fixed investment 


-9.9 

-7.2 
-11.2 

2.9 
-14.8 


8.6 

3.0 
11.4 

21.5 
8.3 


9.1 

7.0 
10.1 

27.0 
4.2 


8.3 


Structures 


12.7 


Producers' durable equipment 


6.4 


Autos and trucks. 


11.0 


Other. ___ 


4.5 



1 Preliminary. 

Source: Department of Commerce, Bureau of Economic Analysis. 

32 



i 



ceeded its previous peak reached in the fourth quarter of 1973. Growth of 
real spending for producers' durable equipment, on the other hand, slowed 
to 6.4 percent during the year, in contrast to 10.1 percent during the preced- 
ing year. Business purchases of autos and trucks grew much less rapidly 
than earlier. Strength in investment was greatest in durable goods manu- 
facturing — particularly in machinery and in stone, clay, and glass — and also 
in electrical utilities and petroleum refineries. 

The increased strength in investment during the past' 2 years reflected a 
response to growth in profits and increases in capacity utilization in manu- 
facturing during the course of the recovery. Corporate profits (with inven- 
tory valuation and capital consumption adjustments) rose 6.7 percent over 
the 4 quarters ending in the third quarter of last year and amounted to 7^4 
percent of GNP at the end of the period. This shows a substantial improve- 
ment from the 6 percent average ratio in 1974-75 though little change 
from 1977. 

Capacity utilization in manufacturing rose from 83 percent in the latter 
part of 1977 to almost 86 percent at the end of 1978. In general, utilization 
rates were higher in the primary processing industries than in the advanced 
processing industries. Utilization in basic metals industries, which had been 
relatively low at the beginning of the year, rose dramatically and greatly 
improved profits in those industries. 

Thus the rate of investment has been relatively high in the past 2 
years, and the structure of investment has begun to shift toward longer-lived 
assets. Nevertheless, a further rise in the share of GNP directed to business 
fixed investment would be desirable, in order to maintain growth of the 
capital stock in line with the rapidly rising labor force and to meet environ- 
mental and other regulatory requirements. This issue is discussed further in 
Chapter 3. 

NET EXPORTS 

Real net exports fell substantially during the first 2 years of the current 
expansion. During 1977 net exports in 1972 dollars appeared to be leveling 
out at about $11-$ 12 billion, a little less than 1 percent of real GNP. Late in 
1977 and early last year, however, our net export position deteriorated 
further, although the magnitude of this deterioration was exaggerated by the 
effects of the East Coast dockworkers' strike. 

Throughout much of the 1977-78 period exports grew slowly while im- 
ports of both oil and other goods increased sharply. By mid- 1978, however, 
reversals of these trends became evident; net exports in 1972 dollars in the 
last half of 1978 were $3 billion higher than in the first half. 

Agricultural products were once again one of the leading export sectors. 
Agricultural exports, in 1972 dollars, reached a relatively high level of $15.8 
billion in 1978, well above the $12.9-billion average in 1977. Poor crops in 
the Southern Hemisphere last spring and income growth in the rest of the 

33 



world were the main reasons for the increased demand for U.S. farm 
products. 

The volume of nonagricultural exports in the second quarter rebounded 
from depressed levels early in the year and continued to rise strongly 
through the rest of 1978. Accelerating growth in other countries made a 
significant contribution to this advance. The depreciation of the dollar in 
late 1977 and early 1978, which lowered U.S. export prices in foreign 
currencies, also encouraged exports, but its principal effect on exports will 
occur in 1979. 

Import volume grew at an annual rate of 11.6 percent from the begin- 
ning of the expansion until the end of 1977. This is somewhat more 
rapid than past experience would suggest, given the growth of U.S. 
income. That trend has since been reversed. Oil imports were 5.6 percent 
lower in 1978 than in the year before. The startup of 1.2 million barrels per 
day. of Alaskan oil production displaced imported oil and more than offset 
the increase in U.S. oil consumption last year. The volume of non-oil 
mechandise imports grew more slowly during 1978 than in 1977, because of 
less rapid U.S. growth and higher import prices due to dollar depreciation. 

INVENTORY ACCUMULATION 

The cautious inventory policy that has characterized the current expansion 
continued in 1978. This caution was reinforced by sharply rising short- 
term interest rates, which increased the cost of holding inventories. The rate 
of inventory accumulation in 1972 dollars last year was about three-fourths 
of 1 percent of GNP. The ratio of inventories to final sales (in 1972 dollars) 
for the nonfarm sector was nearly constant. The stability of the inventory- 
to-sales ratio is especially noteworthy in the face of the 10 percent share of 
GNP absorbed by business fixed investment. Such a high investment share 
tends to raise the ratio of stocks to sales by virtue of its significant contribu- 
tion to inventories of work in progress. 

One exception to this stability of inventory-to-sales ratios was at general 
merchandise stores. The ratio of real inventories to sales in this sector, which 
has shown a slight uptrend in the past decade, appeared to be moving up 
sharply during the summer and early fall months. A stronger pace of sales 
at these stores late in the year helped to alleviate this problem. 

GOVERNMENT SPENDING 

Government purchases rose less during 1978 than was expected a year 
ago. In real terms the actual increase was 2.0 percent. 

Slower than expected growth was confined principally to the Federal 
sector, where the real value of purchases declined 0.3 percent. Commodity 
Credit Corporation purchases had been expected to decline. The shortfall in 
other purchases was about evenly divided between delays in the buildup 
of the Strategic Petroleum Reserve and shortfalls in numerous other cate- 
gories of nondefense purchases, which rose, in nominal terms, 4 percentage 

34 



points less than anticipated. The slow accumulation of petroleum reserves 
meant lower oil imports and, on balance, had no effect on aggregate de- 
mand, in contrast to the other shortfalls. 

State and local government purchases, in real terms, grew rapidly in the 
first half of last year but slowed in the second half. From the second quarter 
of 1977 through the second quarter of 1978 — a common fiscal year for these 
units of government — the real value of State and local purchases rose by 4.9 
percent. This was a significant contrast to the virtual stability in 1975-77. In 
nominal terms compensation of employees rose by 10.2 percent over this 
period while other purchases rose by 16.4 percent. Construction activity in 
this sector (about one-third of other purchases) had been declining in real 
terms between the last quarter of 1975 and the first quarter of 1977, but it 
appears to have risen substantially in 1978. In the 3-month period ending in 
October the real value of street and highway construction was 5 percent 
higher than a year earlier, sewer system construction was up 14 percent, 
and water supply construction was up 33 percent. 

The acceleration of spending by State and local governments in 1977-78 
primarily reflects two forces: the rise in revenues during the economic ex- 
pansion and a sharp increase in Federal aid. A substantial part of the 1977- 
78 stimulus package was funneled through State and local governments, 
augmenting special countercyclical programs that had been initiated earlier. 
The principal components of the package were an expansion of public 
service employment, authorization of a second round of local public works 
grants, and expansion of antirecession fiscal assistance grants to State and 
local governments. Public service employment exceeded its target of 725,000 
jobs by the spring of 1978 and subsequently declined somewhat. Local 
public works grants were fully committed by the end of 1977, but the ex- 
panded value of outlays followed with a lag. Distribution of antirecession 
fiscal assistance peaked in the third quarter of 1977 and ended a year 
later. 

Real growth slackened in the second half of last year, in part because 
States and localities entered new fiscal years in an environment influenced by 
public sentiment for tax reductions and restraint in government spending. 

As a result of the increased growth in purchases and the pressure for tax 
reduction, the aggregate budget surplus in the State and local sector declined 
sharply in 1978. The surplus on current and capital account (but exclud- 
ing social insurance trust accounts) fell from a peak of $12.8 billion (an- 
nual rate) in the third quarter of 1977 to $1.8 billion a year later. Of the 
$7.5-billion decline that occurred between the second and the third quarters, 
roughly $5% billion is attributable to California's Proposition 13, which 
mandated a reduction of about 50 percent in local property taxes, or about 
one-fourth in total local revenues. This local tax cut was followed by a 
substantial redistribution of funds from the State government, which had 
been incurring a surplus, to the local governments. 

35 



Proposition 13 and similar measures in other States suggest the likelihood 
of significantly slower growth in State and local spending in the near future 
and an approximate balance or a deficit in the aggregate current and capital 
account of this sector. In the fall elections, 1 1 States had proposals on their 
ballots that would immediately limit State and local taxes or expenditures 
or both. Such measures passed in eight of these States. Referenda mandated 
substantial reductions of property taxes in Idaho and personal income taxes 
in North Dakota. The measures in other States differ in their form and the 
degree to which they will constrain taxes and expenditures, but their enact- 
ment — by large margins in some cases — clearly indicates public sentiment 
for budgetary restraint. This is likely to put downward pressure on both 
spending and the current and capital account surplus. 

Movements in this aggregate State and local surplus or deficit are domi- 
nated by national trends but conceal great diversity across States and among 
cities and areas within States. Per capita personal income — perhaps the best 
single measure of taxable resources — varies widely among States, but the 
growth trends in various regions have been narrowing these differentials 
throughout the twentieth century. The regions with the highest income 
levels have tended to experience the slowest growth. These same regions 
have the highest per capita public sector expenditures, the highest tax effort, 
and the highest level of per capita Federal aid. Many forces help to create 
this pattern: high-income localities may choose to spend more on public 
services as well as on private goods and services; where the cost of living 
is high, more must be spent to obtain the same level of services; and some 
high-income areas also contain significant concentrations of poverty and 
have greater needs. Extreme care must therefore be used in drawing general 
conclusions about the fiscal condition of the State and local sector, or of 
individual areas within it, from the aggregate surplus or deficit. 

The social insurance accounts of State and local governments continued 
to show a moderately growing surplus throughout last year. By the end of 
the year the surplus had risen to $22.8 billion, up $3.7 billion from a year 
earlier. Growth in this surplus has been augmented by strong earnings on 
investments as well as the excess of contributions over benefit payments. 
Continued growth in this surplus is likely as States and localities move to 
provide actuarially sound funding of these trusts. 

LABOR MARKET DEVELOPMENTS 

Demand for labor continued to be unusually strong in 1978. Despite 
another sharp increase in the labor force participation rate, the creation of 
new jobs exceeded the growth of the labor force by a substantial margin, 
and the rate of unemployment declined further. The proportion of the work- 
ing-age population employed continued to climb in 1978, reaching 59.0 
percent in the fourth quarter. 

36 



I 



The civilian labor force rose by 2^4 million over the 4 quarters of 1978. 
This is a 2.8 percent annual growth rate, well above the long-term trend rate 
of 2^4 percent per year, which results from population growth and a long- 
term upward drift in labor force participation rates. 

Women, teenagers, and blacks contributed most to the growth of the 
labor force; their participation rates rose to new highs. The participation 
rate for adult women increased 1.5 percentage points to 50.1 percent, passing 
the 50 percent mark for the first time. The teenage participation rate jumped 
1.6 percentage points to 58.5 percent, and that for blacks and other racial 
minorities increased 1.2 percentage points to 62.0 percent. 

Employment increased by 3.3 million from the fourth quarter of 1977 to 
the fourth quarter of 1978, a smaller gain than in 1977 but still large by 
historical standards. The growth in employment was surprisingly large in 
relation to the rise in real GNP, reflecting the year's poor productivity 
performance. The employment gain was broadly based across industries, 
with service-oriented and typically cyclical industries showing the largest 
gains. 

Among manufacturing establishments, most nondurable goods indus- 
tries showed little or no growth in employment. Employment was reduced 
in such industries as apparel, textiles, leather products, and tobacco manu- 
factures. Some of the durable goods industries — particularly those related to 
construction and transportation — showed sizable gains. Among these were 
nonferrous primary metals, fabricated metal products, nonelectrical ma- 
chinery (particularly construction and related equipment and computers) 
and aircraft. 

Employment also increased in other major sectors during the year. Of 
these, construction employment grew at the fastest pace, with gain of 1 1 .6 
percent. Other large gains in employment were registered by finance, insur- 
ance, and real estate (5.3 percent) ; retail trade (4.1 percent) ; and services 
(4.4 percent) . 

Employment gains were greatest among women, blacks, and teenagers, 
the groups that led the labor force expansion. The employment increase 
among adult women (aged 20 and over) accounted for more than half 
of the total; the percentage increase in their employment was more than 
double that of their male counterparts. Blacks and members of other racial 
minorities filled about one-third of the new jobs. Employment in these 
groups grew more than twice as fast as that of whites. 

Overall, unemployment declined from 6.6 percent of the labor force in 
the final quarter of 1977 to 5.8 percent in the fourth quarter of 1978. Most of 
the decline occurred early in the year. The unemployment rate for adult 
white women fell to 5.0 percent, but the white teenage unemployment rate 
showed little change, since in that age bracket the growth in the labor force 
was as rapid as the rise in employment (Table 4) . 

Earlier in the recovery the unemployment rate for blacks had declined 
more slowly than that for whites, widening the gap between the two. In 

37 



Table 4. — Unemployment rate and growth in employment and labor force, by 

demographic group, 1978 



Group 



Total. 



White. 



Both sexes 16-19 years 

Males 20 years and over 

Females 20 years and over. 

Black and other 



Both sexes L6-19 years 

Males 20 years and over... 
Females 20 years and over. 



Unemploy- 
ment rate 
(percent >) 
1978 IV 



5.8 

5.1 

14.0 
3.5 
5.0 

11.5 

35.3 
8.3 
10.2 



Employment 



Civilian labor 
force 



Percent change from 
1977 IV to 1978 IV 2 



3.6 

3.2 

1.8 
2.1 
5.2 

7.0 

12.1 
6.1 
7.3 



2.8 
2.5 

2.0 

1.4 
4.4 

5.2 

6.0 
4.7 
5.5 



1 Percent of civilian labor force in group specified; seasonally adjusted. 

> Adjusted for the increase of about 250,000 in employment and labor force in January 1978 resulting from changes 
in the sample and estimation procedures introduced into the household survey. 

Source: Department of Labor, Bureau of Labor Statistics. 

1978 some progress was made in reversing that pattern. The unemployment 
rate for blacks declined by 1.7 percentage points to 11.5 percent, compared 
to the 0.5 percentage point decline for whites to 5.1 percent. 

Since mid- 1975 there has been a fairly steady reduction in the percentage 
of unemployed persons who report job loss as the reason for their unemploy- 
ment. The percentage of unemployed who are reentrants to the labor force 
has been increasing fairly rapidly, while the percentage who are new entrants 
and the percentage who quit their last job have both increased moderately. 
These typical cyclical patterns continued in 1978. 

PRICES AND WAGES IN 1978 

Price developments last year were a major source of disappointment and 
concern. The consumer price index rose by 9.0 percent from November 1977 
through last November; producer prices of finished goods rose by 9.1 percent 
from December 1977 to December 1978, and the GNP deflator rose by 8.3 
percent during the 4 quarters of the year. In all cases the increases were 
considerably greater than in each of the preceding 2 years. 

As shown in Table 5, the acceleration of prices was widespread. Energy 
prices, which had been a major factor contributing to high inflation rates 
in the 1973-75 period, did not play a large role last year. Food prices, how- 
ever, were once again an important influence. Even if one eliminates food 
and energy prices from the price indexes — thus removing the effects of 
external shocks to supply — the remaining prices show an acceleration in 
1978. 

The upward movement in these other prices was a response to a wide 
variety of forces — including the pass-through of higher import prices as- 
sociated with depreciation of the dollar, the effects on home prices of in- 



38 



Table 5. — Alternative measures of inflation, 1976-78 
[Percent change, December to December, except as noted] 



Measure 



1976 



1977 



1978i 



Consumer price index: 2 
All items 



Food 

Energy » 

All items less food and energy. 

Producer price index for finished goods: 



All finished goods 

Consumer goods. 



Foods 

All other. 



Capital equipment 

Implicit price deflator for gross national product 4 



Food consumption 

Other goods and services. 



4.8 

.6 
6.9 
6.1 



3.3 
2.1 



-2.5 
4.9 



6.4 
4.7 



.7 
5.3 



6.8 

8.0 
7.2 
6.4 



6.6 
6.4 



6.6 
6.1 



7.2 
6.1 



5.7 

6.2 



9.0 

11.3 
7.0 
8.6 



9.1 
9.5 



11.9 
8.3 



8.0 
8.3 



11.7 
7.9 



1 Consumer price changes are from November 1977 to November 1978. Changes for price deflators are preliminary. 

2 Data beginning January 1978 relate to all urban consumers: earlier data relate to urban wage earners and clerical 
workers. 

3 Gas (piped) and electricity; fuel oil, coal, and bottled gas; and gasoline, motor oil, coolant, etc. 
« Changes are from fourth quarter to fourth quarter. 

Sources: Department of Commerce (Bureau of Economic Analysis) and Department of Labor (Bureau of Labor Statistics). 

centives to invest in land and houses as an inflation hedge, and some supply 
bottlenecks in construction materials. A particularly troublesome phenom- 
enon, however, was the slow growth in productivity. This added directly 
to costs of production and may indirectly have affected wage rates by in- 
creasing the demand for labor. 

Table 6 shows the acceleration in hourly earnings and in total com- 
pensation per hour, the slower growth in productivity for the nonfarm 
private business sector," and the effects of both of these forces on unit labor 

Table 6. — Measures of wage rates and costs, 1973-78 
[Percent change, fourth quarter to fourth quarter, except as noted! 



Item 



1973 


1974 


1975 


1976 


1977 


6.4 


9.1 


7.5 


7.4 


7.5 


7.0 


9.4 


8.7 


8.1 


8.0 


8.2 


10.9 


8.6 


8.5 


7.6 




10.0 
.9 


8.0 
.6 


7.7 
.8 


6.9 
.7 


-.7 


-3.4 


4.4 


2.6 


1.3 


9.0 


14.9 


4.0 


5.8 


6.3 



1978 



Adjusted hourly earnings index J 

Union wage changes (total effective adjustment) *. 
Private nonfarm business sector, all persons: 

Compensation per hour 

Contribution of: 



Wages and salaries and private fringes. 
Employer payments to social insurance. 



Productivity 

Unit labor costs. 



8.2 
7.5 



9.8 



8.7 
1.1 



8.9 



1 Preliminary. 

2 Adjusted for overtime in manufacturing and for interindustry employment shifts. 

3 Agreements covering 1,000 workers or more. Changes are for the four quarters ending in December through 1977 and 
ending in September for 1978. 

* Not available. 



Source: Department of Labor, Bureau of Labor Statistics. 



39 



costs last year. Table 7 indicates that the rise in prices in the nonfinancial 
corporate sector was less than the increase in unit labor costs. Nevertheless 
profits per unit of output still continued to increase, although much less 
rapidly than in 1977. 

Table 7. — Changes in price, costs, and profits, per unit of output, private 

nonfinancial corporate sector, 1973-78 

[Percent change, fourth quarter to fourth quarter, except as noted] 



Item 



1973 


1974 


1975 


1976 


1977 


8.6 


16.3 


2.1 


7.3 


5.6 


2.2 


8.6 


18.7 


1.5 


6.1 


-6.3 


-26.0 


66.9 


.5 


16.4 


6.3 


23.1 


6.5 


1.9 


2.1 


6.4 


13.8 


7.3 


5.3 


5.8 



1978" 



Labor costs 

Nonlabor payments 

Corporate profits 

Other nonlabor costs 2. 
Implicit price deflator 



8.7 
3.3 
1.2 
4.2 
6.8 



1 Changes are measured from third quarter 1977 to third quarter 1978. 

2 Interest, rent, depreciation, and indirect business taxes. 

Source: Department of Labor, Bureau of Labor Statistics. 

Chapter 2 develops in considerably more detail the relation between 
wages, productivity, and prices. The following sections describe some of 
the special factors adding to inflation last year. 

FOOD PRICES IN 1978 

Retail food prices for the 12 months ending in November 1978 rose 11.3 
percent — well above the 8.4 percent increase for all items excluding food. 
Most of the increase in food prices occurred during the first half of the 
year and was very broadly based. Prices for meats, poultry, fish, and eggs 
rose 18.9 percent (Table 8) , and the index for fruits and vegetables was up 
11.5 percent. The index for all food consumed at home was 12.0 percent 
higher. Prices of imported food rose less than in 1977, however, because coffee 
prices declined from the record highs of 1977. 

Table 8. — Changes in retail food prices, 1977-78 
[Percent change, seasonally adjusted annual rate] 



Consumer price index component 


1978 


Nov. 1977 

to 
Nov. 1978= 


1 


II 


III 


IV t 


All food 


12.4 

10.7 
13.7 

28.4 
2.5 
12.2 
14.0 


20.0 

10.9 
24.2 

46.8 
15.8 
22.6 
22.4 


7.0 

10.8 
5.2 

-4.9 
12.3 
14.3 
11.7 


6.8 

7.9 
6.3 

11.2 

7.4 

6.7 

-1.8 


11.3 


Food away from home 


10.0 


Food at home 3 


12.0 


Meats, poultry, fish, and eggs 


18.9 


Dairy products . 


9.5 


Fruits and vegetables 


11.5 


Sugar and sweets 


11.6 







t Based on October-November data. 

2 Based on unadjusted data. 

3 Includes items not shown separately. 

Note.— Data beginning 1978 relate to all urban consumers; earlier data relate to urban wage earners and clerical workers. 
Source: Department of Labor, Bureau of Labor Statistics. 



40 



Increases of this magnitude in food prices were not anticipated as the 
year began, and price forecasts for food had to be revised repeatedly in the 
following months. There were a number of reasons for the unfavorable 
developments: hog production failed to expand despite favorable grain 
prices; cattle marketings continued to decline; adverse weather curtailed 
some crops here and abroad ; government farm programs and price support 
levels were changed; prices of major grains rebounded from abnormally 
low levels in 1977; costs of food processing and marketing went up; and 
the increase in the minimum wage raised labor costs both for food market- 
ing and for restaurant meals. 

The cattle cycle has always been a major determinant of U.S. meat prices. 
When ranchers become optimistic about future beef prices, they hold back 
cows and heifers for breeding purposes. Over a period of years, cattle 
numbers rise until overexpansion of the. herd occurs and the large supplies 
lead to a fall in beef prices. The cycle then enters its liquidation phase until 
the herd is reduced enough to make the longer-term price outlook more 
promising. At that point the cycle begins again. 

The past 4 years have witnessed a prolonged liquidation phase. The 
number of cattle and calves on farms in the United States declined from 
132 million head in January 1975 to about 111 million head at the end of 
last year. This represents a 16 percent drop, the sharpest ever recorded. 
With fewer cattle available in 1978, slaughter was down by 5 percent, and 
per capita beef consumption declined bv more than 4 percent to 120 
pounds. 

It was expected that lower beef production in 1978 would be largely 
offset by a higher output of pork and poultrv. Analysis of the intentions of 
hog producers in late 1977 indicated a orobable 10 percent increase in pork 
production in the following year, but the severe winter weather radically 
chanered the outlook. Conception rates fell, abortions increased, and 
the average number of pigs per litter dropped 6 percent below normal. 
Disease, rising feed costs, uncertainty over government regulation of feed 
additives and use of nitrites in processing, and structural changes in the 
industry also kept hog production from reaching expected levels. When it 
became evident that pork production was not expanding, meat prices began 
to rise very rapidly, with strong consumer demand adding further pressure. 

Adverse weather in 1978 also affected other food prices. Heavy rains in 
California delayed spring plantings last year and fresh vegetable prices rose 
dramatically. Most fruit crops were also reduced by bad weather, apples 
being the only major exception. In December 1978, freezing temperatures 
in southern California and Arizona once again hurt citrus and fresh 
vegetable crops. 

In contrast, weather conditions during the growing season for grain were 
very favorable in the major producing areas. The corn crop reached a record 
of 7.1 billion bushels, and the national average corn yield exceeded 100 
bushels per acre for the first time in history. Other major grain harvests 
were also fairly ample. 

41 



Changes in government farm programs and increased price support levels 
for agricultural products also led to retail price increases for some food prod- 
ucts in 1978. In January, import fees on foreign sugar were raised in order 
to guarantee the effectiveness of the domestic price support program. In 
March, land diversion programs were expanded to improve grain prices. The 
grain reserve programs, which were instituted last year to provide some 
insurance against the price-raising consequences of a crop failure, led to 
higher wheat and flour prices while the reserves were being built up. Dairy 
price support levels rose automatically in April and October, as required by 
statute, but lower production and strong demand kept prices of milk and 
dairy products above those higher support levels. 

Increasing costs and prices in the rest of the economy also affected food 
prices. The value of farm commodities, together with the cost of imported 
foods such as coffee and cocoa, accounts for 43 percent of retail food expendi- 
tures. The other 57 percent represents the cost of transporting, processing, 
and marketing the commodities. Thus, when the costs of labor, transporta- 
tion, packaging, and other inputs increased last year, the food sector was 
affected as were other sectors. Approximately one-half of the food price 
increase in 1978 was attributable to higher prices for these marketing services. 

The 15.2 percent increase in the (nonfarm) minimum wage at the begin- 
ning of 1978 may have had a particularly large effect on restaurant and 
institutional food prices and on food marketing costs. Since many workers in 
these industries are paid the minimum wage, an increase in that wage would 
quickly translate into higher costs. For food consumed away from home, 
which represents about one-fourth of total food consumption, prices rose 10 
percent during the year. 

DEPRECIATION OF THE DOLLAR 

Another source of inflatibnary pressure in the U.S. economy during 1978 
was the decline in the value of the dollar relative to other currencies. 
An index of the value of the dollar relative to the currencies of 10 other 
industrial countries — computed by using the percentage of world trade of 
each country as its weight (multilateral basis) — shows a 13.8 percent decline 
in the dollar from September 1977 to September 1978. Weighted by each 
country's share of U.S. trade (bilateral basis), the decline was 8.9 percent. 
The difference between the two indexes is largely caused by the high share of 
Canadian trade in the latter index and by the 8.0 percent decline of the 
Canadian dollar relative to the U.S. dollar. 

Changes in the relative value of the dollar affect the price of imported 
goods and thus the cost of living. Over the 4 quarters of 1978, prices of non- 
fuel imports rose 15J4 percent. This was substantially less than the 24.3 per- 
cent rise in foreign prices in dollar terms in the 10 largest countries of the 
Organization for Economic Cooperation and Development (OECD). The 
difference between these two price movements indicates that foreign pro- 
ducers absorbed a substantial amount of the fall in the dollar by reducing 

42 



their profit margins on exports. Such behavior is consistent with historical 
experience. 

The rise in the prices of imported goods has a further effect on domestic 
prices by raising wage demands and by allowing price increases for goods 
that compete with imports. The econometric evidence suggests that over 
a 2-year period these indirect effects might amount to about twice the direct 
effects on prices of final products. A 10 percent depreciation will generally 
result in a roughly 1 J/2 percent increase in prices by the end of a 2- to 3-year 
period, with approximately half of the effect coming in the first year. 

The impact of the decline of the dollar on domestic prices is limited by 
the denomination of oil prices in dollars. As a result, the price of imported 
fuel does not rise as the dollar falls. In addition, the Organization of Petro- 
leum Exporting Countries (OPEC) did not raise its prices in 1978. The large 
increase in OPEC prices announced on December 17 for 1979 means that 
this moderating influence will not be repeated this year. 

Inflation affects the depreciation of the dollar as well as being affected 
by it. Countries with low inflation rates tend to have strong currencies, 
and the appreciation of their currencies helps to hold down the rise of their 
domestic price levels (Table 9) . Relative inflation rates are by no means the 
only factors that influence the relative value of currencies. Indeed, in the 
short run, factors such as relative interest rates, differences in real growth, 
the size of the current account balance, and expectations of traders in 
foreign exchange markets are likely to be dominant influences. 

Table 9. — Changes in currency values and consumer prices, by country, third quarter 
1977 to third quarter 1978 
[Percent change| 



Country 



Canada 

France 

Germany 

Italy 

Japan 

United Kingdom. 



Dollar 

exchange 

rate 


Consumer 
price 
index 


-6.4 


9.3 


11.6 


9.3 


15.0 


2.4 


5.4 


11.9 


38.1 


4.0 


11.3 


7.8 



Sources : Board of Governors of the Federal Reserve System and Organization for Economic Cooperation and Development. 
HOUSING COSTS 

Housing is the largest single component of the consumer price index, com- 
prising over one-third of the expenditures covered by this measure. This com- 
ponent encompasses many items, such as rent, utilities, and home purchase 
costs. Most of these costs have been rising very rapidly. 

Housing is one sector in which a classical demand-pull inflation seems 
to have been occurring in 1978. The strong demand for houses has raised 
the price of both land and materials. The average price of a new single- 



43 



family house rose by 13% percent in the 12 months ending in October. 
Demands for construction materials have strained the capacity of some 
supplying industries, and prices of building materials have risen strongly. 
Lumber prices, for example, have risen 33 percent in the last 2 years, and 
shortages of gypsum products have been common. The increase in energy 
prices since 1974 has also affected prices of building materials, particularly 
the prices of insulation and asphalt products such as shingles. 

If housing starts taper off this year as expected, some of these problems 
should become less severe. Energy conservation tax credits enacted late 
in 1978, however, may keep pressure on prices of insulation. 

Some have questioned whether the widely used consumer price index 
appropriately measures the real burden of rising housing costs in periods of 
rapid inflation. Capturing the magnitude of rising housing costs in the 
index is indeed difficult. Rental costs in multifamily dwellings are, in princi- 
ple, fairly easy to measure. Owner occupancy poses different problems, how- 
ever, because of the distinction between the costs of owning a house and the 
costs of using its services. 

During the most recent revision of the consumer price index, the Bureau 
of Labor Statistics reviewed the conceptual basis for the home purchase 
portion of the index. In principle, there are two ways to measure the cost 
of owner-occupied housing. The first is to measure the home prices, mort- 
gage interest rates, and other cost elements faced by those buying a home 
during the period in question. This is the method that has been used his- 
torically in the GPL A second approach would be to price the flow of 
services from housing, using rents on equivalent units as a measure of the 
true cost of living in a house. This method is used in the national income 
and product accounts and in the implicit deflators for GNP and its 
components. 

When home prices move up, rents on comparable units will tend to rise. 
Unless vacancy rates are very low, however, rents will adjust upward only 
gradually to a level that fully reflects the new and higher price of homes. 
Rent controls in some areas may contribute to the slowness of the process of 
adjustment. Consequently in a period when housing prices are rising rapidly 
the measurement technique now used in the CPI will show a faster increase 
in the cost of home-ownership than the alternative index based on equivalent 
rents. Conversely, when the increase in home prices slows, rents may keep 
rising for some time in order to close the gap, and the current CPI technique 
will show a slower price increase than the alternative. 

Under either method of measurement, however, a period of rapid rise in 
housing prices would increase the housing cost index faster than the rise in 
out-of-pocket costs paid by homeowners who had earlier purchased their 
homes at lower prices and contracted for mortgages at lower interest rates. 
An important part of the total rise in the CPI last year stemmed from the 
homeownership component. New home prices rose by 1 1 percent and mort- 

44 



gage interest rates by 9 percent. Only about 10 percent of homeowners — 
those who actually bought a house last year — were directly affected by the 
resulting increases in the cost of homeownership. 

MEDICAL CARE 

Medical care costs have added significantly to inflation for most of the 
past decade. Except for the period of mandatory wage-price controls from 
1971 through early 1974, medical care costs have risen much more rapidly 
than other prices. From 1973 through 1977 the cost of medical care rose at 
an average annual rate of 10.2 percent, compared to 7.7 percent for the total 
consumer price index. During 1978 the increase in medical care prices 
slowed to 8.8 percent, about the same rate as the total CPI. 

The reason for this moderation is not completely clear. Prospects for man- 
datory cost containment legislation may have been partly responsible; the 
success of some of the State cost containment programs may also have been 
influential. It should be noted, however, that total hospital expenditures con- 
tinued to increase as a share of GNP since the deceleration early in 1978 in 
the prices of many hospital services was partially offset by greater use of 
these services. A significant reacceleration of hospital costs also occurred 
late in 1978. These developments point out the need for some more perma- 
nent means of containing the rise of hospital costs. The Administration 
will resubmit legislation with this aim in 1979. 

AGGREGATE DEMAND MANAGEMENT IN 1978 

The focus of aggregate demand policy changed during the past year, 
as inflation accelerated and unemployment fell faster than had been 
expected. The acceleration of inflation in the context of continued large 
employment gains prompted a lowering of the target for output growth. 
Fiscal and monetary policies shifted toward restraint. 

In the fourth quarter of 1977, during the budget planning period, the 
unemployment rate stood at 6.6 percent. With normal increases in produc- 
tivity a 1978 economic growth rate well above the long-run trend would 
have been needed to achieve a further significant reduction in unemploy- 
ment. Fiscal policy was designed to meet that objective by continuing, 
though gradually reducing, the stimulative effects of the Federal budget. 

The stimulus measures adopted in 1977 were expected to have a 
dwindling effect in the course of 1978. A reduction in income taxes, to 
take effect in the final quarter of the year, was proposed to offset the 
dampening effect on real growth of increases in social security taxes and of 
the higher effective tax rates resulting from inflation. Some normal cyclical 
rise in interest rates was anticipated, but it was expected that monetary policy 
would be generally accommodative. 

During the early months of the year, however, it became apparent that 
the slow growth in productivity, and the associated sharp increases in the 

45 



demand for labor, were contributing to a serious acceleration of inflation. 
For this reason, it became appropriate to slow the growth of the economy 
to preclude the emergence of excess demand. This slowing would provide an 
environment in which structural anti-inflation measures and the dollar 
support program could be effective. 

FISCAL POLICY 

Shifts in the high-employment budget offer a useful way to summarize 
changes in fiscal policy. The adjustments made to obtain the high-employ- 
ment budget remove from actual receipts and expenditures the effects of 
fluctuations in the economy. Consequently, this budget shows the surplus or 
deficit as it would be if the economy were moving smoothly along its poten- 
tial growth path. Changes in the high-employment surplus or deficit reflect 
the effects on receipts attributable to inflation and to growth in potential real 
GNP as well as to discretionary changes in Federal expenditures and tax 
rates. Short-run changes in the high-employment surplus or deficit are rela- 
tively insensitive to assumptions regarding the level of potential GNP. 

Table 10 shows that fiscal policy shifted toward restraint in 1978. For the 
calendar year as a whole, the high-employment deficit was reduced by almost 
one-half from 1977 and declined continuously through 1978. The tax cut at 
the beginning of 1979 will temporarily increase the high-employment deficit, 
but the high-employment budget will be about in balance by mid- 1980. 

The 1978 reduction in the high-employment deficit occurred for four rea- 
sons. First, the effects of the 1977-78 stimulus package gradually dissipated: 
public service employment peaked slightly above 725,000 jobs in the spring, 

Table 10. — Actual and high-employment Federal receipts and expenditures, 
national income and product accounts, calendar years 1973-78 

[Amounts in billions of dollars; quarterly data at seasonally adjusted annual rates] 





Actual 


High-employment 


Calendar year 
or quarter 


Receipts 


Expendi- 
tures 


Surplus or deficit (-) 


Receipts 


Expendi- 
tures 


Surplus or deficit (— ) 




Amount 


Percent 
ofGNP 


Amount 


Percent 
of GNP i 


1973 


258.3 
288.6 

286.2 
331.4 
374.5 
431.6 

374.3 
385.5 

396.2 
424.7 
441.7 


265.0 
299.3 

356.8 
385.2 
422.6 
461.0 

430.7 
444.1 

448.8 
448.3 
464.5 


-6.7 
-10.7 

-70.6 
-53.8 
-48.1 
-29.4 

-56.4 
-58.6 

-52.6 
-23.6 
-22.8 


-0.5 
-.8 

-4.6 

-3.2 
-2.5 
-1.4 

-2.9 
-3.0 

-2.6 
-1.1 
-1.1 


256.8 
301.1 

320.5 
356.9 
394.5 
446.6 

392.2 
403.4 

417.5 
438.1 
455.2 
475.8 


265.1 
298.6 

350.1 
380.3 
419.0 
459.6 

427.4 
441.4 

447.0 
447.1 
463.0 
481.2 


-8.4 
2.6 

-29.6 
-23.4 
-24.6 
-12.9 

-35.3 
-38.0 

-29.5 
-9.0 
-7.9 
-5.4 


-0 6 


1974 


.2 


1975 


— 1.8 


1976 


-1.3 


1977 


—1.3 


1978' 


-.6 


1977:111. 


— 1.8 


IV. 


-1.9 


1978.1 


-1 4 


II 


—.4 


III 


-.4 


IV 


-.2 















1 High-employment surplus or deficit as percent of high-employment gross national product. 

2 Preliminary. 

Note.— Detail may not add to totals because of rounding. 

Sources: Department of Commerce (Bureau of Economic Analysis), Department of the Treasury, Office of Management 
and Budget, and Council of Economic Advisers. 



46 



and antirecession fiscal assistance to State and local governments ceased at 
the end of the third quarter. Second, inflation and real growth moved indi- 
viduals into higher tax brackets during the year. 

Third, Federal spending rose less rapidly than had been anticipated. 
The increase in total expenditures as measured in the national income 
and product accounts was $38.2 billion from the end of 1977 to the end of 
1978. This increase amounts to only 8.6 percent in nominal terms in a 
period when the GNP deflator rose 8.3 percent. The substantial shortfall 
in fiscal 1978 from the rate of spending anticipated in the January budget 
came to $12/2 billion on a unified budget basis, or 2.8 percent of total out- 
lays. The prospect of a shortfall became apparent fairly early last year, but 
no attempts were made to offset it, since additional fiscal restraint was a 
desirable outcome in view of unfolding economic circumstances. 

For fiscal 1979, which beean last October, budget projections were simi- 
larly scaled down; on a unified basis, fiscal 1979 Federal spending is now 
expected to be $493.4 billion or $7.6 billion below the original esti- 
mates made last January (adjusted to include earned-income tax credits in 
excess of taxpayers' liabilities, which are now treated as outlays) . 

The fourth element in the shift toward fiscal restraint was the President's 
decision to revise his tax reduction proposal. Originally the Administration 
had requested a $25-billion tax reduction effective on October 1, 1978. In 
May the President asked that the net reduction be scaled back to $20 billion 
and its effective date postponed to January 1, 1979. Reduction was 
still needed to offset the fiscal drag stemming from the changes in effective 
tax rates occasioned by inflation and real growth, from increases in social 
security taxes previously enacted, and from the $6.6-billion increase in social 
security taxes legislated in 1977 to take effect in 1979. Nevertheless, a smaller 
and later reduction appeared appropriate in view of the need for greater fiscal 
restraint. The Congress ultimately enacted a $20.6-billion reduction of per- 
sonal and business taxes plus a $0.7 billion increase in outlays for the earned 
income tax credit. This package yields a net revenue loss of $18.9 billion 
when allowance is made for the expiration of $2.5 billion in employment tax 
credits. These tax measures are discussed in Chapter 3. 

These adjustments to fiscal policy moved the budget more quickly toward 
two previously stated objectives of the Administration: reducing Federal 
outlays to 21 percent of GNP and achieving a balanced budget in the context 
of reasonable economic growth (Table 11). Fulfillment of these objectives 
is a major challenge because it will require offsetting the upward pressure on 
Federal outlays from rising prices and from automatic increases in entitle- 
ment programs under current law. 

MONETARY POLICY 

Two major developments dominated monetary and financial conditions 
during 1978. The first was a substantial rise in interest rates. The second 
was the introduction of new financial instruments through which thrift 

47 



Table 11. — Federal unified budget outlays as percent of gross national product, and 

budget surplus or deficit, fiscal years 1955-80 

[Current dollars] 



Fiscal years 



1955-59 average. 
1960-64 average. 
1965-69 average. 
1970-74 average. 



1975- 
1976 »_ 
1977- 
1978- 



1979 (estimate). 

1980 (estimate). 



Budget outlays as percent of GNP 



Total 



18.3 
19.2 
19.9 
20.3 

22.4 
22.5 
22.0 
22.1 

21.6 
21.2 



Income 
security 



3.0 
4.1 
4.0 
5.6 

7.5 
7.8 
7.5 
7.2 

6.9 
7.1 



National 
defense 



10.0 
8.8 
8.5 
6.7 

5.9 
5.4 
5.3 
5.1 

5.0 
5.0 



Budget surplus 

or deficit (— ) 

(billions of 

dollars) 



-2.3 
-4.2 
-7.2 
-13.8 

-45.2 
-63.5 
-45.0 
-48.8 

-37.4 
-29.0 



i Includes other outlays not shown separately. 
1 Transition quarter averaged with fiscal year 1976. 

Sources: Department of Commerce, Department of the Treasury, Office of Management and Budget, and Council of 
Economic Advisers. 

institutions could continue to attract funds, an innovation that modelled 
significantly the degree to which high short-term interest rates depressed 
housing construction. 

Chart 1 shows the rise in both short- and long-term interest rates. These 
increases came in several phases. A small upward movement in short-term 
rates occurred early in the year after the Federal Reserve raised the discount 
rate in January in response to international developments. This was followed 
by a period of relative stability through mid-April as the slow pace of eco- 
nomic activity in the first quarter led to quite moderate growth in the mone- 
tary aggregates. Very rapid growth in the aggregates began in the second 
quarter and persisted into the summer. The efforts of the monetary authori- 
ties to moderate the growth of the aggregates resulted in substantial increases 
in short-term interest rates. The Federal funds rate rose by 2 percentage 
points between March and the middle of October. Most other short-term 
rates rose in an approximately parallel fashion. Measures to defend the dol- 
lar, announced at the beginning of November, prompted a further dramatic 
increase in rates. The discount rate was raised by a full percentage point, 
from 8/2 to 9/2 percent, on November 1 ; between then and the end of the 
year the Federal funds rate rose by another three-fourths of a percentage 
point to about 10 percent. 

The movement of long-term interest rates was determined by current 
developments in short-term rates, by anticipations of future interest rate 
and price developments, and by supply and demand considerations in capital 
markets. Long-term rates drifted up somewhat during the first quarter, 
when demands for business credit remained strong, but leveled out sub- 
sequently as expectations developed that rates might be nearing cyclical 
peaks. With short-term rates continuing to increase, the yield curve by 
October had become inverted; that is, long-term rates were below short- 
term rates. 



48 



Chart 1 



Selected Interest Rates and 
Bond Yields 



PERCENT PER ANNUM 
14 



SHORT TERM RATES 




o n 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 m 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 M 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 r 

1973 1974 1975 1976 1977 1978 



12 



10 - 



4 - 



BOND YIELDS 




oi 



I I I I 



I I I I 



I ! I I I I I I I I ! ' I ' ' ' 



I I I I I I I I I I 



> 



1977 



1978 



1973 1974 1975 1976 

NOTE TREASURY BONDS ARE CONSTANT MATURITIES 

SOURCES DEPARTMENT OF THE TREASURY. BOARD OF GOVERNORS OF THE FEDERAL 

RESERVE SYSTEM. AND MOODY'S INVESTORS SERVICE 



49 



Behavior of the Major Monetary Aggregates 

During the first half of the year the behavior of the monetary aggregates 
paralleled fluctuations in the real economy. Growth of M x (demand deposits 
and currency) and M 2 (including, in addition to M l5 time and savings de- 
posits other than negotiable certificates at large commercial banks) was 
quite slow in the first quarter and much faster in the second quarter. Growth 
of these two monetary aggregates continued to be relatively strong in the 
third quarter, despite rising interest rates and slowing growth of real GNP. 

Between the final quarter of 1977 and the third quarter of last year, M a 
grew at an 8.2 percent annual rate, well above the upper end of the Federal 
Reserve's long-term target growth range of 4 to 6J/2 percent. Studies that 
relate the real value of M, to real GNP and to short-term interest rates 
indicate that the usual historical relationship held up fairly well through this 
period. The continuation of rapid growth of the monetary aggregates 
through the third quarter appears to have been largely attributable to the 
rapid increases in nominal GNP which raised transactions demands. There 
was virtually no growth in M, during the fourth quarter when interest rates 
were rising sharply. 

In the latter half of the year, two major innovations in financial markets 
tended to change the usual relation between the monetary aggregates on the 
one side and economic activity and interest rates on the other. The first inno- 
vation was the new regulation permitting commercial banks and nonbank 
thrift institutions on June 1 to begin issuing money market certificates 
(MMCs) of 6-month maturity in minimum denominations of $10,000. 
Commercial banks were permitted to pay a maximum yield on these certifi- 
cates equal to the discount rate on 6-month Treasury bills, but interest 
could be compounded if the bank chose to do so. The maximum rate for non- 
bank thrift institutions is one-fourth of a percentage point above the rate pay- 
able by commercial banks. 

The second innovation, introduced on November 1, was a regulation 
permitting commercial banks to offer individual customers an automatic 
transfer service whereby funds are automatically transferred from a 
customer's savings account to cover needs for funds in the customer's 
checking account. By the end of the year it is estimated that there were $3.2 
billion in 420,000 accounts covered by this service. Use of these services can 
be expected to grow over the future. 

The introduction of MMCs influenced the growth of M 2 by enabling 
banks to retain time and savings deposits that they would otherwise have 
lost. Growth in M 2 remained very strong in the third quarter, at a 10.8 
percent annual rate, but slowed significantly in the fourth quarter to 4.5 
percent. 

The introduction of the automatic transfer service began to have a sig- 
nificant effect on the growth of Mj in the last 2 months of 1978. During 
November and December, M, declined $0.6 billion. In the absence of the 
new deposit services, M, probably would have risen by about $1 billion. 

50 



In response to this effect on the behavior of the conventional aggregates, 
the Federal Reserve defined a new aggregate, M, + . It includes, in addition 
to Mi, all passbook savings accounts at commercial banks and all checkable 
deposits at nonbank thrift institutions (negotiable order of withdrawal 
accounts, demand deposits at mutual savings banks, and share draft ac- 
counts at credit unions). This aggregate thus includes all transactions 
accounts plus those accounts from which transfers to the automatic transfer 
service accounts are most likely to occur. The annual rate of growth of this 
aggregate dropped from 6.1 percent in the first half of 1978 to 2.4 percent 
in the second half. 

Role of MMCs in Monetary Restraint 

The new money market certificates played a critical role in the way the 
economy responded to monetary restraint in 1978. Experience would have 
led one to expect that the large rise in interest rates would sharply curtail 
the availability of mortgage credit during 1978, with strongly adverse effects 
on home building. The growth of mortgage credit did taper off somewhat 
during the year and residential construction activity did flatten out. The 
magnitude of these responses was very small, however, compared with past 
periods of tight financial markets. 

In previous periods of sharply rising market interest rates, individuals 
began at some point to divert funds from deposits in thrift institutions to 
market securities because of the low ceiling rates on deposit instruments. 
The growth of thrift deposits usually slowed to a 4-6 percent range 
in such periods, and net new inflows (excluding crediting of interest) fell 
to around zero. This necessarily slowed the acquisition of mortgages by these 
institutions, and consequently housing credit dried up. 

During late 1977 and early 1978 this same pattern began to emerge. 
After the introduction of MMCs in the middle of the year, however, the 
pattern was dramatically reversed. As a result, mortgage acquisitions de- 
clined much less than in previous periods of rapidly rising market interest 
rates. 

The introduction of these instruments does not wholly resolve the dis- 
intermediation problem or entirely buffer the housing market from credit 
restraint. Home buyers are affected by the higher cost of credit, although 
they are affected much less than before by the reduced availability of credit. 
Furthermore, since mortgage rates do not rise commensurately with short- 
term rates, the thrift institutions are confronted with reduced cash flow 
for two reasons. First, the spread between the cost of new deposits and 
the return from new mortgages narrows. Second, the composition of deposits 
becomes more heavily weighted by the higher-interest certificates. Since 
this is occurring faster than the mortgage portfolio is rolled over, the average 
cost of deposits is rising relative to the average yield on mortgages. In early 
1978, however, the spread between the return on the mortgage portfolio and 
the cost of deposits had become quite large and the narrowing that occurred 

51 



in the second half of the year was relatively small. Therefore — barring a 
prolonged period of very narrow spreads between mortgage rates and short- 
term rates — savers, the thrift institutions, and the housing market will all 
benefit from the new instrument. 

The reduced sensitivity of mortgage credit availability to rising market 
interest rates smooths the adjustment of the economy to credit restraint. 
It also implies, however, that interest rates must move through somewhat 
larger cyclical swings to achieve the effect on aggregate demand that would 
formerly have resulted from variations in both credit availability and interest 
rates. Such a change also means that the distribution and timing of the 
response of the economy to monetary restraint will be different. The period 
ahead will require adroit reading of the signals to judge the degree of 
restraint that is occurring and is appropriate. 

CREDIT FLOWS IN 1978 

Credit flows had been very strong at the end of 1977 and remained so 
through the first part of last year. The ratio of total funds raised in credit 
markets (exclusive of corporate equities) to GNP reached a record peak 
in the third quarter of 1977 and moved only slightly lower in the following 
2 quarters. Some decline developed in the second and third quarters of 
last year. The ratio of total private funds raised to private GNP remained 
on a record high plateau from the third quarter of 1977 through the first 
quarter of last year but then began to decline. 

The composition of credit flows shifted during the year. Mortgage credit 
flows peaked late in 1977 and then moderated somewhat. With the dollar 
value of residential construction continuing to rise, the ratio of net home 
mortgage extensions to household investment in residential construction 
turned downward last year from a very high peak. The large volume of 
mortgage credit that was being used in late 1977 and early 1978 relative 
to residential construction suggested that homeowners were realizing capital 
gains on houses when ownership changed hands and were using the funds 
to finance other types of expenditures. 

Consumer credit continued to grow strongly through the first half of the 
year, reflecting the strength of new car sales and sales of other durables. 
The rate of installment credit extensions leveled out, however, in the 
second half of the year on a plateau slightly below the June peak. 

Federal Government borrowing also declined relative to the total of funds 
raised in credit markets. The moderation in Federal borrowing from domestic 
sources resulted from the shift in fiscal policy previously discussed and also 
from an increase in official foreign purchases of U.S. securities with dollars 
obtained through intervention in foreign exchange markets. 

The nonfarm, nonfinancial corporate business sector borrowed heavily in 
the fourth quarter of 1977 and the first quarter of last year. Indeed, credit 
market funds raised in the first quarter were more than a third greater than 

52 



a year earlier. The amount of funds raised leveled out subsequently at an 
annual rate below this peak but exceeded all previous years except 1974. 
Business borrowing from commercial banks, in particular, was exceptionally 
heavy in the first half but slowed in the second half of the year. The strength 
of capital spending relative to internal funds is the primary reason for the 
rapid growth in business credit demands. The ratio of external funds raised 
to capital expenditures rose to slightly under one-half in 1978, which is a 
high though not unprecedented figure. 

Efficiency of Financial Markets 

Both of the innovations in financial markets described above work to 
provide individuals with a competitive return on their savings. The auto- 
matic transfer services perform another valuable function: they reduce the 
loss of efficiency associated with substantial shifts of funds from one type of 
deposit to another in response to interest rate differentials. Furthermore, to 
preserve the competitive position of nonbank thrift institutions, the Federal 
Home Loan Bank Board is considering giving nonbank thrift institutions 
authority to receive deposits from which third-party payments may be made. 
Such a move might further stabilize their deposit flows. 

These changes, however, entail cumbersome bookkeeping and transac- 
tions procedures. A further consolidation of the institutional changes ini- 
tiated this year would be to move toward a uniform structure for commercial 
banks and nonbank thrift institutions under which all of these institutions 
would have authority to accept household checking deposits and to pay inter- 
est on them. The bill proposed by the Administration in the last Congress to 
authorize negotiable order of withdrawal accounts for all U.S. banks and 
thrift institutions was one approach to this reform. 



53 



CHAPTER 2 

Reducing Inflation 

ECONOMIC POLICY IN THE UNITED STATES faces a formidable 
challenge in the years immediately ahead. Inflation must be brought 
under control if the strength of the economy is to be maintained and if the 
significant gains in employment and output over the past 4 years are not to 
be jeopardized. Unwinding an inflation that has been building for more than 
a decade will require monetary and fiscal restraint to moderate the pace of 
economic growth. We will have to learn to achieve social objectives within 
the constraints of tight government budgetary policies. Widespread com- 
pliance with the President's standards for wage and price behavior will be 
essential. 

This chapter presents a diagnosis of our inflationary problem and explains 
what the Administration is doing about it. Special factors were partly re- 
sponsible for the acceleration of inflation during 1978, as Chapter 1 indi- 
cated, but there was also a substantial increase in the underlying rate of 
inflation. Unit labor costs rose sharply, reflecting some acceleration of wage 
inflation and a deterioration in the growth of productivity. These develop- 
ments, along with their important implications for economic policy, will be 
analyzed in the following discussion. 

THE 1978 ACCELERATION OF INFLATION 

The current inflation has been gathering momentum for over 10 
years. The acceleration began in the late 1960s, when the economic stimulus 
of the Vietnam war added pressures to an economy already approaching 
high employment. With the economy operating at very high rates of resource 
utilization, the rate of inflation rose from less than 2 percent in 1965 to 
about 6 percent in 1969. 

In 1969, policies of monetary and fiscal restraint were applied to cool the 
overheated economy, but the results were disappointing. The economy 
headed into recession, and unemployment rose from 3}4 percent of the 
labor force in 1969 to over 6 percent by the end of 1970. Nevertheless, 
inflation continued at a rapid pace. The rise of consumer prices, excluding 
food, continued unabated in 1970, and the rate of increase of average hourly 
earnings remained unchanged. When inflation failed to respond significantly 
to macroeconomic policy, a 90-day wage and price freeze was announced on 

54 



August 15, 1971 ; it was followed by a period of mandatory wage and price 
controls. 

Relaxation of the controls began in 1973 in response to distortions and 
inequities that had begun to develop in the economy. The relaxation coin- 
cided with a second acceleration of prices, which was in part a consequence 
of rapid economic growth. Between the fourth quarter of 1971 and the first 
quarter of 1973, real gross national product (GNP) increased at an annual 
rate of 7^4 percent, unemployment dropped sharply, and capacity utiliza- 
tion rose. The major inflationary pressures, however, came from a series of 
large external shocks to the American economy. A simultaneous expansion 
in virtually all the industrial countries and the 20 percent depreciation of 
the dollar between mid-1971 and mid-1973 raised the cost of foreign goods. 
A worldwide crop shortage caused food prices to soar. Finally, the oil em- 
bargo by the Organization of Petroleum Exporting Countries (OPEC) and 
the subsequent rise in oil prices contributed to a nearly 60 percent increase 
in the energy component of the consumer price index (CPI) from the end of 
1972 to the end of 1975. 

In early 1975 the rate of inflation fell substantially from the double- 
digit rate of 1974. The severity of the 1974-75 recession was partly respon- 
sible. But smaller increases in food and energy prices and the end 
of the price bulge associated with the lifting of controls were important con- 
tributing factors. By the middle of 1975 the underlying rate of inflation was 
down to the 6 to 6/ 2 percent range. There was no further improvement 
during the early stages of the recovery, despite continued high unemploy- 
ment and much excess capacity. 

Each of the two major episodes of accelerating inflation in the last decade 
was fed in part by relatively stimulative fiscal and monetary policies, and 
each was followed by a recession stemming in part from more restric- 
tive policy actions. But in neither case did the increases in unemployment 
and excess capacity bring inflation down to the levels that preceded the 
acceleration. 

Once under way, a high rate of inflation generates responses and adap- 
tations by individuals and institutions that perpetuate the wage-price spiral, 
even in periods of economic slack. Expectations develop that wages and 
prices will continue to rise at a rapid rate. In response, an increasing pro- 
portion of income is adjusted to inflation by indexation arrangements. Em- 
ployee groups attempt to match the wage gains of other workers in order to 
avoid declines in their own relative earnings. And multiyear collective bar- 
gaining agreements, which now cover over 97 percent of the workers in large 
collective bargaining units, provide pay increases that are more likely to re- 
flect past conditions than the actual economic environment prevailing during 
the term of the agreement. 

The formal and informal adaptations to a long-standing inflation exert a 
powerful force tending to sustain inflation even after the originating causes 
have disappeared. Braking the momentum of past inflation would therefore 

55 



have been a serious problem for economic policy makers even without the 
acceleration of prices and wages during 1978. The price and wage develop- 
ments of this past year have made the task even more difficult. 

INFLATION IN 1978 

The rate of price increase rose markedly in 1978. Some of the acceleration 
was the result of special factors discussed in the previous chapter : the sharp 
rise in food prices early in the year and the fall in the value of the dollar 
that exceeded the depreciation warranted by underlying economic condi- 
tions. A minor offset to this was the stability of world oil prices after OPEC 
elected not to raise oil prices in the face of the sluggish world economic re- 
covery and the consequently weak demand for oil. 

The larger part of the 1978 acceleration, however, came from an unex- 
pected increase in the underlying rate of inflation. The rise in consumer 
prices, excluding food and energy, quickened from 6.4 percent in 1977 to 
8.6 percent in 1978, as shown in Table 12. This is the development that has 
posed the most serious challenge to economic policy. 

The behavior of the underlying rate of inflation is related to movements 
in costs. In 1978 the increase in unit labor costs in the private nonfarm 
sector stepped up considerably, from 6.3 percent in 1977 to 8.9 percent 

Table 12. — Annual rate of change in selected consumer and producer prices and 
employment costs, 1960—78 

[Percent 1 ] 



Item 


Relative 
impor- 
tance, 

December 
1977 

(percent) 


1960 

to 

1965 


1965 

to 

1970 


1970 
to 
1975 


1976 


1977 


1978' 


Consumer prices 

All items 


100.0 

17.7 
8.6 
73.7 

100.0 
75.1 


1.3 

1.5 

.4 
1.4 

.6 
V) 

4.0 

3.8 
.2 

3.9 
.0 

1.1 


4.5 

3.7 
2.5 
5.0 

2.8 
(») 

6.4 

5.9 

.5 

1.1 

5.2 

4.2 


6.9 

9.4 
10.9 
5.7 

8.6 
7.6 

8.2 

7.3 
.9 
1.6 
6.5 
6.6 


4.8 

.6 
6.9 
6.1 

3.3 
5.5 

8.5 

7.7 
.8 
2.6 
5.8 
5.2 


6.8 

8.0 
7.2 
6.4 

6.6 
6.6 

7.6 

6.9 
.7 
1.3 
6.3 
5.9 


9.0 


Food. 

Energy 

All items less food and energy 

Producer prices for finished goods 

All finished goods 


11.3 
7.0 

8.6 

8.7 


Finished goods less foods 

Private nonfarm business, all persons 
Compensation per hour 


7.8 
9.8 


Contribution of: 

Wages and salaries and private fringes. 




8.7 


Employer contributions to social in- 
surance.. .. ._ 




1.1 


Output per hour . _ 




.8 


Unit labor costs. 




8.9 


Implicit price deflator 




7.9 









1 Preliminary. 

2 Through 1977, changes are measured from December to December for prices and from fourth quarter to fourth quarter 
for private nonfarm business data. For 1978, changes are from November to November for prices and from fourth 
quarter to fourth quarter for private nonfarm business data. 

3 Not available. 

Sources: Department of Labor (Bureau of Labor Statistics) and Council of Economic Advisers. 

56 



in 1978. Both of the determination factors of unit labor costs contributed 
to the acceleration. Compensation per hour went up from a 7.6 percent 
rate of increase in 1977 to a 9.8 percent rate during 1978. Productivity, 
which had risen only 1.3 percent for nonfarm business in 1977, advanced 
even more slowly — at a 0.8 percent rate in 1978. 

The acceleration of cost pressures during 1978 was unevenly distributed. 
In manufacturing, unit labor costs, which had risen 5.8 percent in 1977, 
increased at an annual rate of 6.0 percent in 1978. Productivity in manu- 
facturing rose more rapidly in 1978 than in 1977 (3.5 compared to 3.0 
percent in 1977). However, the most substantial rise in the rate of increase 
of unit labor costs was in nonmanufacturing, where productivity actually 
declined. 

Most econometric analyses of the relation between prices and wages con- 
clude that fluctuations in productivity growth that are expected to 
be temporary are not usually translated into similar fluctuations in prices. 
For that reason price movements in the nonfarm sector are less volatile than 
year-to-year changes in unit labor costs. And in 1978 the sharp acceleration 
in unit labor costs, stemming in part from the very poor productivity record, 
was not fully matched by an acceleration in prices charged by nonfarm 
producers. Even so, the rise in unit labor costs was still a major factor in the 
acceleration of inflation (Chart 2) . 

Chart 2 

Unit Labor Costs and Deflator, 
Nonfarm Business 

PERCENT CHANGE FROM YEAR EARLIER 



16 


- 










- 


12 




UNIT LABOR COSTS 




/ 1\ 
/ < • 

/ < » 

/ ' h 

/ ' u 

1 ' 1 

/' V 

i y 
i 


I 


- 


8 






// 




I 

\ 


/ 7 
A. / ' 


4 




J IMPLICIT PRICE ^ 
"\..4 DEFLATOR 


f 



































-4 


I I I I I I I I I I I I I I I I I I I 


I I I I I I I I I I I I I I I I I I I I I I I I I ! ! ! I I I 


linl 


Hill 


1 1 1 1 1 


1 i i ; 1 i i i 



1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 

NOTE: DATA RELATE TO ALL PERSONS 
SOURCE: DEPARTMENT OF LABOR 



57 



EXPLAINING THE 1978 INFLATION 

The worsening in the underlying rate of inflation during 1978 raises a 
fundamental question for macroeconomic policy: Has the U.S. economy 
reached full employment of its labor and capital resources? The question 
involves three issues concerning demand and unit cost pressures that are 
analyzed in the remainder of this section. The first is whether capacity utiliza- 
tion became so tight that there was excess demand in product markets, 
driving up prices relative to costs. The second has two aspects: How much 
did the wage acceleration that occurred in 1978 reflect excess demand in 
labor markets, and do those markets now approximate conditions in which 
further reductions in aggregate unemployment would raise the inflation 
rate? The third issue relates to productivity: To what extent is the recent 
disappointing behavior an aberration and to what extent does it reflect a 
more fundamental slowdown in the potential growth of the economy during 
the years immediately ahead? 

How Tight Were Product Markets in 1978? 

During the course of the recovery, rates of capacity utilization have in- 
creased significantly, and they rose still further in 1978. At the end of 1978 
the 86 percent rate of capacity utilization in manufacturing indicated 
by the Federal Reserve index was still well below the highs of the 
early 1950s and :aid-1960s, and somewhat below the highs of the 1972-74 
period (Chart 3). In the materials-producing industries, where high rates 
of capacity utilization in 1973 were an important source of inflation, cur- 
rent rates of utilization have remained substantially below the 1973 peaks 
(Chart 3). 

Statistical measures of capacity utilization offer only an imperfect guide 
to the presence or absence of excess demand in product markets. There is 
other evidence, however, that industrial capacity was not under severe pres- 
sure. Typically, periods of capacity strain lead to sharp increases in unfilled 
orders, especially in the durable goods industries. But ratios of unfilled orders 
to shipments have remained far below earlier highs, both for durable goods 
industries as a whole and for the nondefense capital goods industries 
(Chart 4). 

At the same time, excess demand developed in a few industries. For 
example, the building materials industry appeared to be under demand 
pressure because of capacity limitations. The very high and sustained level 
of single-family home building, combined with a rapid growth in home 
installation of energy-saving measures, led to a sharp increase in demand 
for building materials and thus to strained capacity. As a consequence, 
prices of lumber, wallboard, cement, insulation, and related products rose 
steeply. 

Moreover, although productive capacity was not generally strained over 
the past year, continued growth of industrial production at rates experienced 

58 



Chart 3 



Capacity Utilization Rates 



PERCENT-^ 



MANUFACTURING 




.{ 



} 



I I I I I I 1 1 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 1 I I I I I I I I I I I I I I 

1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 



90 



80 



70 



MATERIALS 




i 



} 



1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 h i 
1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 

-!/ SEASONALLY ADJUSTED. 

SOURCE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. 



59 



Chart 4 



Unfilled Orders-Shipments Ratio, 
Durable Goods Manufacturing 



RATIO (SEASONALLY ADJUSTED) ^ 



NONDEFENSE CAPITAL GOODS 




TOTAL DURABLE GOODS 




I I I I I I I I I I I I 1 I I I I I I I I I I I I I I I 1 I I I I I I I I I I I I I I I I I I I I M I I I I I 1 I I 1 I I M I I I I I M I I I I I 

1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 
U UNFILLED ORDERS-SHIPMENTS RATIO FOR LAST MONTH IN QUARTER 
SOURCE DEPARTMENT OF COMMERCE 



60 



in 1978 would move utilization rates into the range associated with excess 
demand pressure on prices. 

Pattern of Wage Behavior 

Wages began to accelerate early in 1978. The exact quarterly pattern and 
degree of acceleration vary according to the measure of the rate of wage 
increase, but all broad indicators show a similar pattern of wage acceleration 
in late 1977 and early 1978 (Table 13). For the second half of the year, 
wage increases were lower than in the first, but still above the 1976 and 
1977 experience. 

Table 13. — Selected measures of the rate of wage increase, private nonfarm economy, 

1976-78 
[Percent change; quarterly data are annual rates] 



Measure 


1976 


1977 


1978' 


1978 


1 


II 


III 


IV i 


Average hourly earnings 2 


7.6 

7.4 

7.2 

8.1 
6.8 


7.7 

7.5 

7.0 

7.6 
6.6 


8.8 

8.2 

8.0 

7.9 
8.0 


8.4 

9.2 

7.8 

6.6 
9.1 


10.1 

8.4 

8.7 

8.2 
9.1 


7.8 

7.3 

8.2 

8.7 
7.8 


8.9 


Adjusted hourly earnings index^ 3 

Employment cost index * 

Union ... 


7.9 
(«) 
( 5 ) 


Nonunion 


( s ) 







1 Preliminary. 

1 Annual changes are measured from fourth quarter to fourth quarter; quarterly changes for 1978 are from preceding 
quarter. Data are seasonally adjusted. 

3 This index, unlike the average hourly earnings series above it, excludes overtime pay in manufacturing and is adjusted 
to eliminate the effects of interindustry employment shifts. 

* Changes for 1976 and 1977 are measured from December to December; change for 1978 is from September 1977 to 
September 1978; quarterly changes are within quarter. Data are not seasonally adjusted. 

5 Not available. 

Source: Department of Labor, Bureau of Labor Statistics. 

The pattern of acceleration and subsequent deceleration in the first 3 
quarters of the year was dominated by the behavior of wages of nonunion 
workers. In early 1978, for the first time in several years, nonunion wage 
rates increased faster than union rates. This development is normal in labor 
markets when unemployment falls, and the 15.2 percent increase in the 
minimum wage for nonfarm workers on January 1, 1978, undoubtedly con- 
tribute to the high rate of nonunion wage increases in the first half of the 
year. 

The difference between union and nonunion wage changes in 1978 was 
also influenced by the collective bargaining calendar: comparatively few 
major contracts (those covering 1,000 or more workers) were scheduled for 
renegotiation in 1978. Since increases tend to be largest in the first year of a 
collective bargaining contract, years of light bargaining generally are years 
of lower average wage increases for union members. Wage adjustments for 
union workers may be attributed to three different sources: current settle- 
ments, past settlements (those that provide for deferred increases) , and auto- 
matic cost-of-living escalators (Table 14). For the first 9 months of 1978, 
the portion attributable to current settlements was down sharply from its 

61 



1977 level, while that attributable to past settlements and automatic cost- 
of-living escalation was greater than in 1977. The decrease in the current 
settlement portion came about solely because there were fewer new labor 
agreements, not because the average wage increases granted in new set- 
tlements were smaller. As the lower part of Table 14 shows, the new settle- 
ments reached in 1978 in major contracts provided for somewhat larger 
first year increases than settlements in 1977 had done. 

Table 14. — Mean wage and benefit adjustments in major collective bargaining 

agreements, 1976-78 

[Percent] 





1976 


1977 




1978' 




4 quarte 


rs ended 


Type of change 


1 


II 


III 


IV 


Year 


1 


II 


III 


Sept. 
1977 


Sept. 
1978' 


Effective wage-rate changes: 2 

Total effective adjustments 

Adjustment resulting from: 

Current settlement' 

Prior settlement 

Escalator provision 


8.1 

3.2 
3.2 
1.6 

8.4 
6.4 

8.5 
6.6 


1.2 

.3 
.5 
.3 

7.7 
6.7 

9.0 
7.5 


2.9 

1.0 
1.4 
.6 

7.9 

5.9 

8.9 
6.0 


2.7 

1.3 

1.0 

.5 

7.8 
5.5 

10.2 
6.2 


1.1 

.5 
.3 
.3 

7.8 
5.8 

9.5 

6.3 


8.0 

3.0 
3.2 
1.7 

7.8 
5.8 

9.6 
6.2 


1.3 

.5 
.6 
.3 

9.9 

7.3 

14.6 
8.5 


2.6 

.6 
1.4 
.5 

6.9 
6.1 

6.7 
5.9 


2.5 

.5 
1.1 
.9 

7.5 
6.3 

7.0 
5.7 


8.3 

3.5 
3.3 
1.7 

7.7 
5.6 

8.8 
6.0 


7.5 

2.1 
3.4 

2.0 


Increases in new settlements: 4 

Wage rate settlements (1,000 or more 
workers): 


7.8 


Average over life of contract 


6.3 


Wage and benefit settlements (5,000 or 
more workers): 
First-year adjustment 


9.1 




6.5 







■ Preliminary. 

1 Effective wage rate changes are wage rate changes actually going into effect per worker under major contracts in the 
respective quarters. Detail may not add to total because of rounding. 

3 Changes resulting from collective bargaining settlements made that calendar year. 

4 Quarterly data are at annual rates. 

Note.— Quarterly data are not seasonally adjusted. 
Source: Department of Labor, Bureau of Labor Statistics. 

In comparison with 1977 settlements, labor contracts concluded in 1978 
show an acceleration in wages over the life of the contract. Wage rate 
adjustments in new settlements averaged 7.8 percent for the first year and 
6.3 percent annually over the life of the contract during the year ending in 
the third quarter of 1978, compared to 7.7 percent for the first year and 
5.6 percent over the life of the contract for the same period a year earlier. 
(These measures exclude cost-of-living adjustments tied to the future rate of 
price inflation.) 

There is considerable evidence that the responsiveness of wages to over- 
all changes in economic conditions is significantly greater in nonunion than 
in unionized labor markets. Changes in average wage rates paid to union 
members are not significantly related to the contemporaneous unemployment 
rate or alternative measures of labor market pressure, although they are sen- 
sitive to price changes because of cost-of-living adjustments. Most of the 
inertia in average union wages is a by-product of multiyear labor agree- 



62 



ments, in which the size of agreed wage increases is more closely tied to 
economic conditions during and immediately preceding the renegotiation 
of a contract than to conditions during the term of the agreement. 

-Wage increases during the first year of a collective bargaining agreement 
arc about as responsive to labor market pressures as nonunion wages. In- 
creases over the life of the agreement, however, are much less strongly related 
to underlying market pressures prevailing at the time the contract is signed, 
and deferred increases are essentially independent of prevailing market con- 
ditions. Consequently new inflationary pressures show up much more grad- 
ually in union than in nonunion wages. Conversely, when the initial causes 
of inflation subside, the moderating effect is less evident in union wage 
increases than in nonunion. Multiyear collective bargaining agreements 
can therefore be an important source of wage inertia. 

How Tight Were Labor Markets in 1978? 

With unexpectedly slow growth of labor productivity, labor demand was 
strong, and the reduction in the unemployment rate early in the year 
exceeded expectations. Nevertheless the 6.2 percent unemployment rate 
experienced in the first quarter of 1978 was higher than most estimates of 
the rate of unemployment at which inflation will begin to accelerate. In the 
remaining quarters of 1978 the rate was lower but relatively stable within 
a range of 5.8 to 6 percent. 

One approach to the question of labor market pressure is to examine 
how closely labor markets in late 1978 resemble those of earlier periods 
of accelerating wages. During 1978 the overall unemployment rate was 
above the levels associated with accelerating wages in the late 1960s and 
mid-1970s (Chart 5). Such a comparison could be deceptive, however, 
because the demographic composition of the labor force has changed. Cer- 
tain demographic groups have higher rates of turnover and therefore higher 
rates of unemployment, and these groups now make up a larger proportion 
of the labor force than in the past. 

A better indicator of labor-market pressure is a fixed-weight index, con- 
structed so that each demographic group has the same amount of influence 
in each year as it had in a high-employment period like 1956. when the 
aggregate unemployment rate was 4.1 percent. The fixed-weight unemploy- 
ment rate has fallen relative to the official rate over the past decade, but 
in 1978 the fixed-weight rate was still somewhat above the levels of earlier 
periods of tight labor markets. 

A third measure of labor market pressure is the unemployment rate of 
a group of experienced workers with continuous labor force attachment, 
such as the rate for men between the ages of 25 and 54. That rate, too. is 
still somewhat above the levels associated with prior wage accelerations. 

Tight conditions in labor markets also affect labor turnover rates. As the 
number of job vacancies rises relative to the number of unemployed, em- 
ployers first call back former jobholders: but when these are no longer avail- 

63 



Chart 5 



Selected Unemployment Rates 



PERCENT (SEASONALLY ADJUSTED) 

10 



2 - 




' RATE FOR MALES 
AGES 25 TO 54 



I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I ll I I I I I I 

1960 1962 1964 1966 1968 1970 

l/THE FIXED-WEIGHT UNEMPLOYMENT RATE IS CONSTRUCTED UNDER THE 
ASSUMPTION THAT THE COMPOSITION OF THE LABOR FORCE WITH 
RESPECT TO SEVEN DEMOGRAPHIC GROUPS REMAINS UNCHANGED OVER 
THE PERIOD SINCE 1956. 

NOTE SHADING INDICATES PERIODS OF ACCELERATING WAGES 
SOURCES DEPARTMENT OF LABOR AND COUNCIL OF ECONOMIC ADVISERS 



I I I I ll I I I I I I I I I I I I I I I I I I I I I I 

1972 1974 1976 1978 



able, vacancies are filled by hiring from the pool of unemployed and by 
bidding workers away from other employers with offers of higher wages and 
other benefits. In response to these incentives, a larger number of workers 
quit their current jobs and take better-paying ones. As a result, both the 
new hire and quit rates in manufacturing tend to rise as labor markets tighten 
and wages accelerate. Both rates have reached postwar peaks in periods of 
very tight labor markets during the past decade. As seen in Chart 6, how- 
ever, the rate of new hiring in late 1978 was below these levels. 

Over the past decade the composition of the work force has shifted toward 
young and inexperienced workers, who tend to quit their jobs more fre- 
quently in the search for better employment. The quit rate associated with a 
given degree of labor market pressure has therefore drifted up over the past 
decade. Although measured quit rates were relatively high in late 1978, they 
do not necessarily imply as much labor market pressure as they would have 
done at these levels in the mid-1960s. 

Although the measures of labor market tightness examined above did 
not reach levels associated with accelerating wages in the past, that fact 
alone is not sufficient to determine that excess demand was absent from 



64 



Chart 6 



New Hire and Quit Rates In 
Manufacturing 



RATE PER 100 EMPLOYEES-^ 



4 - 




1 - 

n 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 , i . ; 1 1 1 1 1 1 1 i 1 1 1 1 1 1 1 1 1 1 1 : . , i . . 1 1 1 . 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 

1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 

^SEASONALLY ADJUSTED 

NOTE SHADING INDICATES PERIODS OF ACCELERATING WA( ES 

SOURCE DEPARTMENT OF LABOR 

labor markets during 1978. There is some evidence, for example, that even 
the fixed-weight and prime-age male unemployment rates associated with 
accelerating inflation have moved upward over time (Chart 5). Some 
analysts have suggested that increases in the level, duration, and availability 
of unemployment benefits and other transfer payments have raised the unem- 
ployment rates for some groups in the labor force by facilitating longer and 
more frequent periods of job search. These factors, together with changes 
over time in the structure of labor markets, in rates of productivity growth, 
and in the reaction of wages to past and expected rates of inflation, make it 
difficult to estimate the rate of unemployment below which wage accelera- 
tion is likely to occur. A number of studies have attempted to determine 
that rate, but have produced a wide range of results. 

Although it is impossible to estimate the precise rate of unemployment 
below which wages begin to accelerate, an analysis by the Council of 
Economic Advisers and a review of the available studies do identify a range 
of estimates that encompasses the consensus of most observers. The evidence 
suggests that under current labor market conditions the danger of accelerat- 
ing wages begins to mount as the rate of unemployment falls significantly 
below 6 percent. During 1978 the unemployment rate moved into the top 
of the range. The economy also underwent an acceleration of wages. But 
since the range itself is uncertain, we cannot automatically conclude that 
the lower unemployment rate caused the acceleration. A more careful look 
at developments is necessary. 

65 



CAUSES OF WAGE ACCELERATION 

The pattern of union and nonunion wage increases in 1978 is consistent 
with the view that tightening labor markets were a partial source of wage 
acceleration. But the moderation of the rate of increase in wage rates after 
the first quarter casts doubt on the hypothesis that the unemployment rate 
had declined to levels producing a sustained acceleration of wages and prices. 
It suggests that the acceleration of wages in early 1978 may derive from 
other factors. 

To explore these issues the Council conducted an econometric analysis 
of several potential explanations for the 1978 wage acceleration. The anal- 
ysis examined two aspects of labor market pressure : the general balance be- 
tween the demand for and supply of labor resources represented by the level 
of the unemployment rate, and the more transitory pressures generated by 
the rapidity with which unemployment decreases as employment gains 
exceed labor force growth. 

The rapid drop in unemployment in late 1977 and early 1978 was accom- 
panied by a sharp growth of employment. It is quite possible that a very rapid 
rise in the demand for labor relative to the increase in the labor force may 
cause an acceleration in wages, even though the level to which unemploy- 
ment falls does not imply excess demand for labor. A large increase in hiring, 
occurring in a short period and spread across a large number of industries, 
causes many workers to leave low-wage jobs as high-wage vacancies appear. 
Employers in low-wage industries face a special difficulty when they must 
not only add to their work force but replace those who have quit to 
accept higher-paying jobs. Wage rate increases may therefore be particu- 
larly large in low-wage industries. While ultimately the pool of unemployed 
might be enough to fill the new jobs without putting added pressure on wage 
rates, the attempt to hire large numbers of workers quickly sets up temporary 
imbalances in labor demand and supply that accelerate wage increases. 

The Council's analysis confirmed that the level of the unemployment rate 
early in the year played a limited role in the 1978 wage acceleration. How- 
ever, pressures associated with the speed of the decline in unemployment 
were an important source of increased wage inflation. The rapidity of the 
reduction in the unemployment rate added about 0.1 percent to the adjusted 
hourly earnings index during the fourth quarter of 1977 and another 0.3 
percent during the first half of 1978, according to estimates made by the 
Council. During the second half the unemployment rate held fairly steady, 
and the absence of further pressure from this source contributed to decelera- 
tion of wage increases late in the year. 

A second important factor in the wage acceleration was the minimum 
wage increase in January 1978. According to the Council's analysis, between 
0.2 percent and 0.4 percent was added to the adjusted hourly earnings index 
in the first quarter by the change in the minimum wage. If the minimum 
had not been raised, the index would have risen at an annual rate of around 

66 



7.9 percent in the first quarter instead of the 9.2 percent that actually oc- 
curred. Thus, over two-thirds of the acceleration of the index in the first 
half of the year can be explained by the combined effects of the speed with 
which unemployment declined and the increase in the minimum wage. 

In summary, in late 1977 and early 1978 a marked but temporary acceler- 
ation of wages followed a rapid fall in unemployment. The acceleration re- 
flected the influence of minimum wage increases and the unusual growth of 
demand for labor during late 1977 and early 1978. The acceleration also 
occurred at a time when productivity growth was very low, and the two 
developments together added strong impetus to cost and price increases. 
Although the rapidity of the drop in unemployment put some transitory 
pressure on wage rates, the level of the unemployment rate during that 
period was still above most estimates of the range associated with a sustained 
increase in inflation. Later in the year, however, the recovery clearly brought 
the unemployment rate into the top of that range. In view of the acceleration 
in inflation which has occurred, a further reduction of the unemployment 
rate during 1979 would run some risk of generating excess demand and 
creating inflationary pressures in labor markets. 

THE PRODUCTIVITY SLOWDOWN 

Productivity growth in 1978 showed a very marked slowdown from ac- 
customed rates, adding substantially to inflationary pressures and raising 
fundamental concerns about underlying trends. With real GNP growth of 
about 4 percent over the year, exceeding the normal trend rate of growth, 
most observers expected that productivity in the private nonfarm sector would 
grow at least 2 percent. Instead, as seen in Table 15, productivity showed 
essentially no improvement, increasing only 0.6 percent in the course of the 
year. The slowdown was concentrated in the nonfarm, nonmanufacturing 
sector, where productivity actually declined 0.3 percent during 1978. 
Productivity growth in manufacturing, on the other hand, was strong. 

The slow productivity growth over the past 2 years adds to the ac- 
cumulating evidence that the underlying trend in productivity growth 
since 1973 has been substantially lower than in earlier periods. Between 
1948 and 1965, productivity growth in the private nonfarm sector averaged 
2.6 percent per year. In 1965-73 this rate declined to 2.0 percent. Since 
1973, private nonfarm productivity growth has averaged less than 1 per- 
cent per year. In the following examination of recent evidence on produc- 
tivity growth and the discussion of its implications for the growth of poten- 
tial output, the key questions raised by recent experience are these: Was 
the recent poor performance a nonrecurrent extraordinary event, from 
which we will soon bounce back? Or does the recent lag in productivity in- 
dicate that the U.S. economy has entered a period of very slow produc- 
tivity growth? 

67 



Productivity Determinants 

During most of the postwar period the economy produced productivity 
gains exceeding 3 percent annually, as shown in Table 15. However, a 
number of the factors generating the strong productivity growth between 
World War II and the mid-1960s have since been reversed. 

Table 15. — Labor productivity growth, 1948—78 
[Percent change per year] 



Sector 



1948 


1955 


1965 


1973 


to 


to 


to 


to 


1955 


1965 


1973 


1977 


3.4 


3.1 


2.3 


1.0 


2.7 


2.6 


2.0 


.9 


3.3 


2.9 


2.4 


1.5 


2.4 


2.4 


1.7 


.6 



1977 

to 

1978i 



Private business econorny. 
Nonfarm 



Manufacturing 

Nonmanufacturing. 



0.4 
.6 



2.5 
-.3 



1 Preliminary. 

Note.— Data relate to output per hour paid for, for all persons. 

Source: Department of Labor, Bureau of Labor Statistics. 

For example, between 1948 and 1973 high rates of private investment 
led to a growth in the capital-labor ratio (measured by the ratio of the 
net nonresidential capital stock to aggregate hours worked in the private non- 
farm sector) amounting to almost 3 percent per year. Since 1973, as a result 
of low rates of investment, that growth rate has dropped to 1 % percent per 
year. Although the precise effect of slower growth in the capital stock is hard 
to measure empirically, analytical studies estimate that it could well have re- 
duced productivity growth by up to one-half of a percentage point per 
year from earlier trends. 

Productivity growth has also been reduced by a dramatic shift in the 
age-sex composition of employment. Starting about 1965, the children of the 
postwar baby boom attained working age, adding many young and inex- 
perienced workers to the labor force. Rapid increases in the labor force 
participation of women also added to the supply of less experienced workers. 
If average earnings of each age- sex group are used as a rough approximation 
of the relative productivity of its members, losses in productivity growth due 
to increases in the proportion of young and inexperienced workers in the 
labor force may be calculated. Such demographic shifts in employment can 
explain a reduction of 0.4 percentage point in the annual growth rate of 
productivity between 1965 and 1973. Since 1973 this trend has slowed as 
the new workers that entered the labor force between 1965 and 1973 have 
become older; and, for the more recent period, the reduction has been closer 
to one-third of a percentage point. 

Increased economic and social regulation has aggravated the productivity 
slowdown in a number of ways. Productivity is a measure of output pro- 
duced per unit of resources used in production. Economic regulation, as in 
transportation, precludes labor and capital from flowing to those uses that 



68 



have a relatively high value. The effects of social regulation are more com- 
plicated. The gains from social regulation- — in such forms as reduced pol- 
lution and greater safety — are generally not included in measured output. 
When an increasing fraction of society's labor and capital resources is di- 
verted to producing these gains, measured productivity growth is reduced. 
In addition, important indirect costs are generated by social regulation. 
The implementation of new regulatory statutes is often associated with 
considerable litigation and uncertainty which tends to reduce innovation 
and investment. Moreover, some regulations specify or suggest the tech- 
nology to be used to meet new standards, rather than prescribing a level of 
performance to be attained. As a consequence, innovations that could meet 
the standards at lower cost are not encouraged. 

On an aggregate basis one private study estimates that for 1968-73 the 
direct costs of compliance with environmental, health, and safety regula- 
tions may have reduced the annual growth of output relative to total inputs 
in the private nonfarm sector by 0.1 percentage point. Similar estimates 
for 1973-78 are incomplete, because of lags in the compilation of data, 
but according to preliminary estimates these restrictions may have sub- 
tracted an additional 0.3 percentage point from annual growth of output 
relative to inputs since 1973. 

Productivity growth has fallen significantly in many industries over the 
past several decades. (See Table 16.) The costs of regulations have increased 
substantially in some of these industries but not in others. For example, 
from 1950 to 1965 labor productivity in mining grew 4.3 percent per year, 
but since 1973 it has declined at an annual rate of 6.1 percent. In the late 
1960s and early 1970s stringent mine safety laws began to take effect. Some 
part of the productivity decline in mining can be attributed to other factors, 
and there have been such measurable benefits as lower accident rates, but 
regulation has undoubtedly been very costly in terms of real output per hour 
worked. In the utilities sector, growth in output per hour worked fell 
successively from 6.1 to 3.5 to 0.2 percent per year in 1950-65, 1965-73, 
and 1973-77. While a number of influences have been at work to reduce 
productivity growth in this industry, the increase in environmental regulation 
had an important bearing. 

The loss of productivity growth as a consequence of increasing social 
regulation does not itself imply that the costs of regulation exceed its benefits. 
It has already been noted that the output measures generally used to calcu- 
late productivity do not include environmental improvements and other 
benefits of regulation. Nevertheless, the magnitude of the productivity effects 
does highlight two facts: regulation is very costly; and benefits should be 
closely compared with costs in the design of regulatory legislation and 
specific regulations. 

Some have suggested that a decline in the intensity of research and devel- 
opment in the United States may be a significant cause of the productivity 
slowdown. The evidence for such a view lies in the falling ratio of research 

69 



and development expenditures to total output; this ratio reached a peak of 
3.0 percent in 1964, but has since dropped to an estimated 2.2 percent in 
1978. Most of the reduction can be attributed to a substantial cutback 
in military and space-related research — research that may have a somewhat 
less direct effect in increasing aggregate output per hour worked in the 
private sector than basic research or private research and development. Pri- 
vate industry has consistently provided about 1 percent of GNP for research 
and development since the mid-1960s. In the course of time, however, the 
direction of industry's research and development activity may have shifted 
away from basic research and new product development in response to 
such influences as the changed regulatory environment. 

Little of the 1965-73 decline in private nonfarm labor productivity or the 
further reduction in 1973-78 seems to stem from shifts in the industrial 
composition of employment. Although movement out of the farm sector 
added a sizable productivity bonus in the early postwar years, this process 
had ended by the mid-1960s. Further, even though the proportion of the 
work force engaged in manufacturing has grown smaller since 1965, the 
level of manufacturing productivity has been about the same as that of the 
private nonfarm sector as a whole; the sectors of the economy employing 
larger proportions of the work force include some with higher and some with 
lower levels of productivity, and hence the shift has left aggregate pro- 
ductivity more or less unchanged. 

Productivity Growth Since 1973 

Productivity growth in the nonfarm business sector since 1973 has been 
unusually erratic. Although growth during 1976 was in line with the 1965-73 
trend, there were abnormally low growth and even declines in 1973-74 and 
1977-78. The productivity decline in 1973-74 was particularly striking. 
Labor productivity in the nonfarm business sector fell in every quarter from 
the second quarter of 1973 to the fourth quarter of 1974, dropping a total 
of 4.2 percent in a 7-quarter period. On the basis of the usual relationship 
between fluctuations in productivity and fluctuations in output, no more 
than 1 percentage point of that decline could be attributed to the sharp 
recession during the period. The additional drop of 3.2 percentage points 
accounts for much of the difference between the expected 2 percent annual 
growth rate between 1973 and 1977 and the 0.9 percent rate that actually 
occurred. 

In both 1977 and 1978, productivity growth was again disappointing. 
Although private nonfarm productivity was expected to increase at least 
2 percent per year, it grew instead at only 1.3 percent in 1977 and 0.8 per- 
cent in 1978. This latest deterioration in productivity indicates that the 
slowdown in 1973-74 was not just a temporary aberration and adds to the 
accumulating evidence that the secular trend in productivity growth may be 
considerably less than 2 percent per year. 

70 



Recent deviations of productivity from its postwar trend have been so 
pronounced that one is tempted to search for the influence of special factors. 
Some suggest that the oil embargo of 1973-74 and the subsequent quadrup- 
ling of oil prices had an adverse impact on productivity growth. However, 
it is difficult to find a mechanism by which an oil crisis could have such an 
immediate and severe effect on the economy. Widespread declines in pro- 
ductivity growth rates would only occur as adjustment of production 
methods to economize on energy took place. Actually, adjustment to the new 
oil prices has been extremely slow. Moreover other countries in which energy 
prices rose more than in the United States did not show such large produc- 
tivity declines. In general, possible productivity-reducing effects occur as 
firms substitute labor or cheaper fuels for oil, or as energy-inefficient plant 
and equipment are replaced, but these effects will be spread very gradually 
over a long period. 

There is no obvious set of special factors that could explain the poor 
productivity record of 1978. Year-to-year variations, however, have always 
been substantial, and deviations from trend of as much as 1 percentage point 
are not unusual. If the long-term growth rate of productivity has fallen well 
below earlier rates, as now seems likely, a year with a very small increase in 
production should occasion little surprise. 

Part of the decline in the growth of private nonfarm productivity between 
1965 and 1973 was attributable to reduced productivity gains in the con- 

Table 16. — -Productivity growth by industry, 1950-77 
(Percent change per year) 



Industry 


1977 output 

share 
(percent) 1 


1950 
to 
1965 


1965 
to 
1973 


1973 
to 
1977 


Agriculture 


2.9 
1.5 
4.3 

9.9 
14.4 

3.9 

3.2 

2.3 

7.3 
10.0 

15.4 

12.0 

12.5 

100.0 


4.9 
4.3 
3.4 

3.2 
2.5 

3.0 

5.3 

6.1 

2.6 
2.3 

1.6 

1.2 

.4 

2.7 
2.6 


3.6 

1.9 

-2.1 

3.3 
2.2 

2.9 

4.6 
3.5 

3.4 
2.1 

.2 

1.7 

.5 

2.0 
1.9 


3.0 


Mining 


-6.1 


Constriction 


.3 


Manufacturing: 
Nondurable 


2.2 


Durable 


1.2 


Transportation 


1.0 




6.7 


Utilities 


.2 


Trade: 
Wholesale 


-.8 


Retail _ 


.8 


Finance, insurance, and real estate 


2.3 


Services 


-.3 


Government 


.1 


All industries: 

Current weights 


1.1 


Fixed weight (1977 output weights) 


1.1 









1 Detail may not add to 100 percent because of rounding. 

Note.— Growth data relate to output per hour worked for all persons. 

Sources: Department of Commerce (Bureau of Economic Analysis) and Council of Economic Advisers. 



71 



struction and financial sectors. Statistics on productivity in these sectors (and 
those in the government sector) are notoriously bad, and so it could be 
argued that the apparent reduction in productivity growth during this period 
was a statistical artifact. However, the further widespread decline since 1973 
lends no support to that interpretation. 

Table 16 shows the pattern of labor productivity growth (gross product 
originating per hour worked) for 13 major industries. In almost every sector 
of the economy the growth of productivity has slowed appreciably. Data for 
1978 are not yet available; but, given the aggregate productivity perform- 
ance last year, sectoral averages for 1973-78 will be even lower than for 
1973-77, except perhaps in manufacturing. 

POTENTIAL GNP 
Behavior Since 1973 

The erratic productivity performance of the last 5 years raises serious 
questions about earlier estimates of the economy's productive potential. 
Potential GNP is defined as the level of real output that the economy could 
produce at high rates of resource utilization. The level of potential output 
is less meaningful than its rate of growth. The latter gives the best estimate 
of how much the economy can actually grow over the next few years with- 
out putting additional pressure on labor or product markets. Before making 
a judgment of the future trend for potential output, it is useful to review 
the growth of potential over the last 5 years and to examine recent behavior 
of the unemployment rate. 

The Council of Economic Advisers has undertaken several reexaminations 
of the conceptual as well as the empirical basis of potential output over the 
last 3 years. These studies led to a significant reduction in 1977 in the esti- 
mate of the growth of. potential, lowering the estimate to 35/2 percent annu- 
ally for the period from the fourth quarter of 1968 onward. Previously, the 
growth rate of potential had been estimated to be 4 percent for the period 
from the fourth quarter of 1968 to the fourth quarter of 1975 and 3^4 
percent thereafter. The 1977 revision, discussed in the 1977 and 1978 
Economic Reports, puts the potential GNP in 1978 at $1,462 billion (1972 
prices), about 5.6 percent higher than actual GNP. 

The 1977 and 1978 estimates were based on a higher benchmark unem- 
ployment rate and on the optimistic assumption that the productivity decline 
in 1973-74 was an aberration that would be subsequently corrected. The 
underlying productivity trend was therefore assumed to be equal to that 
observed between 1965 and 1973. For that assumption to prove correct, 
strong increases in productivity would have had to occur since 1974. Produc- 
tivity growth in 1975 and 1976 did show substantial improvement, keeping 
open the possibility that productivity would return to the level indicated 
by the 1965-73 trend; and early in 1978 initial productivity statistics sug- 
gested a sizable 3 percent gain for 1977. However, the subsequent down- 

72 



ward revision of the productivity statistics for 1977 and the very poor 
productivity performance of 1978 make the earlier view untenable. It no 
longer seems reasonable to assume that the exceedingly poor productivity 
growth in 1973-74 and 1977-78 represented statistical aberrations or one- 
time events, implying no reduction in the long-term trend. Downward re- 
visions of our estimate of long-term productivity growth and of potential 
GNP are clearly necessary. 

The uncertainty about the growth of potential output over the 1973-78 
period requires one to distinguish three factors affecting productivity: its 
long-term trend, its cyclical movements, and the erratic declines from trend 
that occurred in 1973-74 and to a lesser extent in 1977-78. 

It is possible to place rough bounds on the range in which the 1973-78 
trend of productivity growth must lie by examining two separate views. The 
optimistic view holds that 1973-74 was a period in which productivity and 
potential output dropped as a result of nonrecurring factors affecting the 
level of productivity, after which the long-term trend of productivity growth 
resumed its earlier pace. On this basis we calculate the long-term trend rate 
of growth in productivity from 1973 to 1978 to be about 2 percent per year 
and the growth of potential GNP over this period to be 3.5 percent per 
year. Such a view of productivity behavior interprets the 1977-78 perform- 
ance as another marked aberration, which has temporarily reduced produc- 
tivity well below its long-term trend. 

The pessimistic view holds that the 1973-74 period was not extraordinary. 
According to this view long-term productivity growth began to slow sub- 
stantially after the mid-1960s, although unexpectedly favorable develop- 
ments in late 1972 and in early 1973 disguised the fact. The poor average 
performance of productivity since early 1973 reflects that slowdown, and 
the particularly disappointing episodes in 1973-74 and 1977-78 are fluctua- 
tions around a greatly reduced long-term trend. According to this inter- 
pretation the estimate of potential should be based on a long-term growth 
of productivity which follows a much slower pace after 1973. This pessi- 
mistic version produces an estimated long-term trend rate of productivity 
growth during the past 5 years of around 1 percent a year, and a growth 
of potential GNP of only 2.5 percent annually over the 1973-78 period. 

Placing an exact number on recent potential growth is extremely difficult. 
The growth of potential from 1973 to 1978 probably falls between the two 
extremes. The 1973-74 productivity shock was to some extent nonrecur- 
rent. But the deceleration in productivity in recent years is too striking to 
ignore in estimating the long-term trend. 

Unemployment Forecasts 

Another way of analyzing the growth of potential output over the 1973- 
78 period is to examine the actual behavior of real GNP and unemploy- 
ment in this same period. Particularly since mid-1977, the behavior of the 
unemployment rate has been a puzzle. In the economic forecasts underlying 

73 



the 1979 budget, for example, real GNP was forecast to rise 4.7 percent 
over the 4 quarters of 1978 and an additional 4.7 percent in 1979. On the 
basis of estimates that assumed a potential growth of 3.5 percent per year, 
the unemployment rate was forecast to reach 5.8 percent in the fourth 
quarter of 1979. In fact, it reached that level a year earlier, even though 
real GNP growth in 1978 was less than expected. 

The most common method of forecasting the unemployment rate relates 
that rate to the gap between actual and potential GNP — the relationship 
known as Okun's law. Over the postwar period a cyclical coefficient of 2 l /i 
has been observed; that is, a reduction of 2^2 percentage points in the gap 
between potential and actual GNP could be expected to lower the unem- 
ployment rate by about \ percentage point. Although aggregate data may 
be unreliable, there is some suggestion that the cyclical coefficient was closer 
to 3 in early years and may have declined to near 2 in the 1970s. 

The use of this relationship and previous estimates of potential GNP 
produced substantial overestimates of the unemployment rate in 1977 and 
1978. For example, from the fourth quarter of 1976 to the fourth quarter 
of 1977, real GNP grew 5.5 percent, reducing the estimated GNP gap by 
2 percentage points under the old definition of potential. The expected 
reduction in the unemployment rate was 0.8 percentage point; the unem- 
ployment rate actually fell by 1.2 percentage points. 

Last year produced a similar surprise: a 4.3 percent increase in real GNP 
with a 3.5 percent growth of potential output should have lowered the 
unemployment rate from 6.6 to 6.3 percent from the fourth quarter of 1977 
to the fourth quarter of 1978. Instead, the unemployment rate was reduced 
to 5.8 percent, 0.5 percentage point more than expected. Given the 
unemployment rate at the end of 1976 and the actual path of output since 
then, unemployment by the end of 1978 was 0.9 percentage point lower 
than was expected, if it is assumed that potential GNP grew at 3.5 percent 
per year. By revising downward our estimate of the growth of potential 
GNP from 3.5 to 3.0 percent per year, about half the unanticipated drop in 
the unemployment rate can be explained. The remainder is within histor- 
ical error margins for the output-unemployment relationship. 

Revised Estimates 

Weighing recent trends in productivity and labor force growth, as well 
as the unemployment-output relation, one can form a rough judgment about 
the trend in potential output over the 1973-78 period. Clearly, placing an 
exact number on potential growth is very difficult. On balance the Council's 
view is that potential output has grown at an average rate of 3 percent during 
the last 5 years. 

The 3 percent overall growth rate of potential between 1973 and 1978 
can be broken down into the following components: a 2.5 percent annual 
growth in potential employment, a 0.5 percent per year decline in annual 
hours per employee, and a 1 percent per year growth in productivity. Reflect- 

74 



ing the large decline in 1973-74, the 1 percent productivity growth during 
the past 5 years was about one-half of 1 percentage point below our estimate 
of the long-term trend (discussed below) . But its effect in depressing poten- 
tial GNP was offset by an annual growth in the labor force about one-half 
of 1 percent above its long-term trend. 

Chart 7 

Actual and Potential Gross National Product 

BILLIONS OF 1972 DOLLARS 
1600 



1500 - 



1400 



1300 



1200 



1100 



1000 - 



SEASONALLY ADJUSTED ANNUAL RATES 



1976 POTENTIAL 



1977 78 POTENTIAL 



\ 




Y 



1979 POTENTIAL 



ACTUAL GNP 



I 



I I I I I I 



I I I I I I I I I I I 1 i I I I ' ' ' I I i I I ' 



> 



1968 1970 1972 1974 1976 

SOURCES DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS 



1978 



The latest estimate puts potential GNP at $1,423 billion in 1978. Chart 
7 shows the latest revision of potential output (labeled 1979 potential) 
along with the two earlier versions. The revised data are in Table 17. 
Actual GNP in 1978 was only about 2^4 percent below its potential level. 

Table 17. — Potential gross national product and benchmark unemployment rate, 

1973-78 
{Billions of 1972 dollars, except as noted] 



Year 


Potential 
GNP 


Actual 
GNP 


GNP gap 
(potential 
less actual) 


Benchmark 
unemploy- 
ment rate 
(percent) 


1973. 


1,227.0 
1, 264. 2 

1, 302. 1 
1, 341. 1 
1,381.4 
1,422.9 


1, 235. 
1,217.8 

1, 202. 3 
1,271.0 
1, 332. 7 
' 1, 385. 1 


-8.0 
46.4 

99.8 
70.1 
48.7 
'37.8 


4.9 


1974 


5.0 


1975 


5.1 


1976 


5.1 


1977 


5.1 


1978 


5.1 







i Preliminary. 

Sources: Department of Commerce (Bureau of Economic Analysis) and Council of Economic Advisers. 



75 



Future Trends 

Projecting potential GNP growth into the future is subject to large errors. 
Growth of the labor force in recent years has varied substantially. In the 
past 5 years, the surprisingly low productivity growth has been offset, as 
noted above, by higher than expected increases in the labor force, producing 
more growth in potential output than would have seemed likely from the 
low productivity statistics alone. 

The wide variation in productivity growth rates since 1973 — and our 
inability to determine precisely the underlying trend of such growth during 
these years — make predicting future rises in private nonfarm productivity 
unusually hazardous. Improved growth in investment during the past 2 years 
should help to improve productivity growth over the next 5 years. At 
the same time, labor force growth should decline when the young people 
born in the baby boom have entered the labor force. This demographic 
reversal should also add to productivity growth, as the drop in the average 
age and experience of the labor force tapers off. These positive develop- 
ments, however, may well be offset to some extent by increased regulatory 
burdens. 

Studies by the Council of Economic Advisers indicate that the range 
of estimates of productivity growth per hour lies between 1*4 and 2*4 
percent annually over the next 5 years. These estimates are based on the 
alternative hypotheses about the 1973-74 period discussed earlier. Taking 
account of recent disappointing productivity developments, our forecast is 
for a productivity growth of 1 ^ percent annually over the next 5 years. This 
projection is based on the view that some part — less than half — of the 1973— 
74 drop in productivity represents nonrecurrent events; in addition, it does 
not assume any rebound of productivity growth from recent trends back 
toward those experienced in the 1950s or 1960s. 

Other components of anticipated potential growth over the next 5 years 
are these: an expected fall in hours per employee of one-half of 1 percent 
annually; an average rise in the labor force participation rate of three- 
fourths of 1 percent annually ; and a rise in the relevant population averag- 
ing 1 J4 percent annually. 

Taken together these components imply a growth in potential output 
over the 1978-83 period of 3 percent annually, the same as the revised 
estimate for 1973-78. It is recognized that we are in a period of adjust- 
ment to new trends in energy, regulation, and international competition, 
that an attempt to estimate the underlying trend is therefore extremely 
hazardous, and that estimates of productivity growth are particularly sub- 
ject to large margins of error. 

ECONOMIC POLICY IN AN INFLATIONARY ENVIRONMENT 

In recognition of the need for a balanced approach to the problem of 
inflation, the Administration announced a three-part anti-inflation program 

76 



in October 1978. The program sets out the basic objectives for economic 
policy in 1979. As the first element of the program, fiscal and monetary 
policy will be used to achieve and maintain a balance between aggregate 
demand and supply that is conducive to a reduction in inflation. The sec- 
ond element is a set of explicit, voluntary wage and price standards designed 
to reduce inflation. The third consists of an effort to reduce the direct con- 
tribution of government to inflation by reducing the cost of regulatory ac- 
tions. In the remainder of this chapter the policy initiatives associated with 
each element of the anti-inflation program are discussed. 

AGGREGATE DEMAND POLICY 

During the course of an economic recovery, a stage is reached at which 
the emphasis of macroeconomic policy must switch from efforts to strengthen 
growth in economic activity to measures that restrain inflation. The U.S. 
economy passed through that stage during 1978. The disappointing perform- 
ance of productivity, the related sharp drop in unemployment, and the accel- 
eration of inflation brought the economy to that position somewhat earlier 
and more abruptly than had been expected. Reducing inflation must be the 
top priority of economic policy in 1979. Unless we bring inflation under 
better control, the progress made during the past several years toward re- 
covering full employment of our economic resources will be jeopardized. 

Since the trough of the recession in early 1975, total real output of goods 
and services has grown at an annual rate of 5 percent, or about 2 percent- 
age points per year faster than the economy's long-term potential. The gap 
between actual economic performance and the level made possible by our 
resource base has therefore steadily diminished. 

Job creation during this recovery has proceeded at an extraordinarily rapid 
pace, especially during the past 2 years. Overall unemployment has therefore 
declined substantially despite record increases in the civilian labor force. 
Nevertheless, unemployment rates remain extremely high for some major 
segments of the population. Both here and abroad, structural unemployment 
represents an unacceptable waste of economic resources and a severe social 
problem. But the problem cannot be dealt with by an expansive aggregate 
demand policy without generating further inflationary pressures. As pointed 
out in Chapter 3, the task must be addressed with measures such as targeted 
employment tax credits and training and jobs programs aimed directly 
at those who cannot find jobs even in a relatively fully employed economy. 

Earlier in this chapter evidence was cited that excess demand pressures 
in most labor and product markets were not a dominant factor in the re- 
cent acceleration of inflation, except for a period in late 1977 and early 
1978 when the rapidity of decline in unemployment contributed to an 
acceleration of wage increases. But the analysis also indicated that the econ- 
omy has approached the point where the overall margin of unused resources 
is very slim. By late 1978 the cyclical component of unemployment was down 
to relatively small proportions, as evidenced by various measures of labor 

77 



market tightness, and the gap between the economy's actual and potential 
output had shrunk from 7.7 percent of potential in 1975 to 1.8 percent in 
the fourth quarter of 1978. Moreover, the outlook for growth in produc- 
tivity is very uncertain. Since we are not yet able to say precisely why pro- 
ductivity gain? were so weak last year, we cannot be confident that our 
estimate of the GNP gap and our forecast of growth of potential GNP are 
correct. 

For all of these reasons it is essential that economic policies be restrained. 
Economic growth must slow to a moderate and sustainable pace — one that 
avoids adding the effects of excess demand to existing inflationary forces. 

As Chapter 3 describes in detail, the Administration is forecasting a 
growth rate of real GNP amounting to 2|4 percent over the 4 quarters of 
1979 and 3|4 percent in 1980. The average growth rate over the 2 years, 2^4 
percent, is slightly below the estimated long-term growth potential of 3.0 
percent. If growth in the labor force and productivity is about in line with 
long-term trends, the margin of slack between actual and potential 
GNP will increase slightly over the next 2 years, and market forces can 
work together with the pay and price standards announced by the President 
on October 24 to moderate inflation. 

Restrained fiscal and monetary policies are an essential ingredient of the 
Administration's strategy for combating inflation. Monetary and fiscal re- 
straints alone, however, are not equal to the task of unwinding an inflation 
that has been under way for more than a decade and has become 
deeply embedded in expectations and in the normal way of doing business 
by consumers, workers, labor unions, and business establishments. Experi- 
ence since the late 1960s, reviewed at the beginning of this chapter, amply 
bears out that conclusion. 

The stubborn resistance of inflation to the traditional remedies reflects 
the fact that the rate of wage and price increase is relatively inflexible in 
the face of slack demand. As last year's Economic Report discussed in more 
detail, there is some evidence that wage rates over the past quarter century 
have become progressively less responsive to the balance between ag- 
gregate demand and supply in labor markets. Reductions in output and 
major increases in unemployment are no longer as effective in slowing the 
rate of wage and price increase. The resulting loss of output, of jobs, and of 
human dignity pays only modest dividends in lower inflation. 

A political consensus exists in our country today that inflation is the 
Nation's most serious economic problem, and that fiscal and monetary 
discipline is needed if inflation is to be reduced. The inflationary problem 
can be dealt with most successfully by persisting with the discipline of anti- 
inflation policies for an extended period even if economic growth for a time 
should fall below the path that is now forecast. The chances of maintaining 
the necessary consensus long enough to make real gains against inflation 
will be much greater if we avoid an overdose of restraint that leads to 
sharp increases in unemployment, reductions in output, and stagnation of 
investment. 

78 



The objective of aggregate demand policies for 1979 and 1980 is thus 
clear. To avoid creation of excess demand, economic growth needs to slow 
to a pace at, or somewhat below, the long-term potential rate of expansion. 
Fiscal and monetary restraint is needed to accomplish that aim. The 
restraint, however, must be applied in a measured way, to moderate growth 
without producing a recession. 

As Chapter 1 indicated, the course of fiscal policy began to shift toward 
restraint during 1978. In fiscal 1979, the year beginning in October 1978, the 
budget deficit will decline to about $37 billion, or $11 billion less than 
in the prior fiscal year. In fiscal 1980 the deficit will drop an additional $8 
billion to a level of $29 billion. Further reductions are expected in succeeding 
fiscal years. To reach these results we must keep a very tight rein on the 
growth of expenditures. In fiscal 1980, Federal outlays will decline to 21 
percent of GNP from 22 percent in fiscal 1978. 

Given the course of fiscal policy being pursued by the Administration, the 
task of reducing inflation will not fall on monetary policy alone. Success in 
the struggle against inflation will require that monetary and fiscal policies 
work together; the objective of slowing economic growth while avoiding a 
recession will necessitate very careful coordination and balance between fiscal 
and monetary policies. 

The task of mapping the appropriate course of monetary policy will not 
be easy. Monetary restraint in 1978 did not affect aggregate demand in the 
way that past history would have suggested, nor will it do so in 1979 and 
1980. As discussed in Chapter 3, institutional changes in financial markets, 
by altering the availability of credit to private borrowers, have reduced the 
degree to which changes in monetary policy affect spending. In today's 
economy, monetary and credit policies increasingly influence private invest- 
ment and consumption through fluctuations in interest rates and associated 
movements in financial asset prices, rather than through changes in nonprice 
terms of credit. 

T/liis development has both negative and positive aspects from the stand- 
point of economic stabilization policy. On the negative side, monetary policy 
is likely to affect aggregate demand with even longer lags than it once did. 
Since our ability to forecast future developments is very limited, the task 
of identifying the appropriate course of monetary policv has become more 
difficult. On the positive side, however, monetary policy has been changed 
from a verv harsh and selective tool of economic stabilization to one whose 
influence on aggregate demand is more gradual and evenly distributed. 
Working together with fiscal policy, monetary restraint, prudently applied, 
can be used more successfully than before to reduce economic growth to 
a modest but sustainable pace and thus create a favorable climate for an 
unwinding of inflation. 

The American people and the Administration look forward to a decline 
in nominal interest rates from their present very high levels. It must be 

79 



clearly recognized, however, that a significant and lasting drop in in- 
terest rates cannot be expected until inflation begins to recede. When that 
happens, interest rates can and should decline. In a less inflationary environ- 
ment it will also be possible to support adequate real growth with a slower 
expansion in the monetary aggregates than is currently required, 

STANDARDS FOR WAGE AND PRICE BEHAVIOR 

General macroeconomic policies can create an appropriate market en- 
vironment for unwinding inflation. However, 10 years of inflation preclude 
achievement of a given deceleration of prices solely through aggregate de- 
mand policy without much more demand restraint and loss of growth than 
would have been the case in earlier periods. Unless ways are found to brake 
the momentum of self-perpetuating wage and price increases that have 
acquired a prominent place in our private behavior, inflation will continue 
at an unacceptably high rate. 

In recognition of this fact the Administration at the beginning of 1978 
called for a slowing of wage and price increases. Each company was asked to 
hold its 1978 price and wage increases below the average of the prior 2 years. 
Although some individuals and groups did make an effort to meet the stand- 
ard, the program was not generally effective. The deceleration standard was 
not specific enough to provide a clear guide for wage and price decisions. 

The Administration therefore incorporated more explicit standards into 
the anti-inflation program announced in late October. The voluntary pro- 
gram now includes an explicit numerical ceiling for wage and fringe benefit 
increases as well as a price deceleration standard for individual firms. The 
potential effectiveness of the program is heightened by expanded monitor- 
ing, by relating Federal procurement actions to the standards, and by an 
innovative program of real wage insurance designed to encourage compli- 
ance. The pay and price standards were published in preliminary form on 
November 7, followed by a 30-day period for public comment. On the basis 
of the comments offered, and after consultation with business and labor 
groups, some modifications in the detailed specifications were announced 
on December 13. The final standards were published in the Federal Register 
on December 28. 

The pay standard limits the increase in hourly wages and private fringe 
benefit payments to a maximum of 7 percent for each employee group in a 
company. Employee groups subject to the pay standard are: (1) individual 
groups covered by major collective bargaining agreements; (2) other non- 
management personnel; and (3) management personnel. This grouping 
takes account of the differing institutional arrangements for setting wage 
rates and prevents an inequitable distribution of wage moderation. It also 
permits considerable flexibility in distributing wage changes among individ- 
uals within a group in response to economic circumstances, equity, and other 
factors, so long as the average increase for the employee group meets the 
standard. 

80 



In collective bargaining situations a newly negotiated contract in which 
wage and fringe benefit increases average no more than 7 percent annually 
over the life of the contract is consistent with the pay standard, provided 
that the increase is no greater than 8 percent in any year of a multiyear 
agreement. In determining compliance with the pay standard, provisions 
for cost-of-living adjustments will be cost out on the assumption of a 
6 percent annual rate of inflation in the consumer price index over the life 
of the contract. The standard therefore leaves room for complete flexibility 
in allocating the pay increase between wage and fringe benefits, and between 
fixed increases and cost-of-living adjustments. Formal collective bargaining 
agreements signed before the announcement of the anti-inflation program 
and (for nonunion employee groups) annual pay plans in operation by 
October 1, 1978, are not subject to the pay standard. 

In determining compliance with the pay standard, employers' con- 
tributions that are required to maintain the existing level of health and 
pension benefits are distinguished from contributions made to improve the 
level of benefits. Increases above 7 percent in the costs of maintaining exist- 
ing health benefits are not counted in judging compliance. Special provi- 
sions also apply to pension plans that pay specified benefits at retirement. 
Changes in employers' costs resulting from changes in funding methods, 
amortization periods, actuarial assumptions, and plan experience are not 
included as pay-rate changes, but changes in employers' costs resulting from 
plan amendments, changes in the benefit structure, or the effect of wage 
and salary changes on benefit levels are included. Further details on the 
application of the pay standard to various pay plans can be found in the 
regulations issued by the Council on Wage and Price Stability on December 
28, 1978. 

In the interest of equity and improved productivity, some exemptions 
from the pay standard are allowed. First, workers who earned an hourly 
wage below $4.00 on October 1, 1978, are exempt from the standard. Sec- 
ond, wage increases in excess of the standard are acceptable if they are 
offset by explicit changes in work rules and practices that demonstrably 
improve productivity to a matching or greater degree. Third, wage increases 
above the standard are justifiable to preserve a historically close tandem 
relationship with another employee group. Finally, where several explicit 
and tightly defined criteria show that pay rate increases above the pay stand- 
ard are necessary to attract or retain employees in a particular job category 
because of an acute labor shortage, the amount of the excess may be ex- 
empted from the standard. 

Rates of price increase tend to vary considerably more from industry to 
industry than rates of wage increase. This occurs because rates of produc- 
tivity growth and the relative importance of nonlabor costs differ across 
industries. Realistic standards must recognize this inherent variation and 
its significance as an allocational device in a market-oriented economy. At 
the same time, it is important to avoid a variable price standard based upon 

81 



a simple pass-through of costs, since such rules can weaken the incentive to 
improve productivity. 

The Administration's approach to the deceleration of inflation avoids 
these pitfalls. The price standard requires that individual firms limit their 
cumulative price increases over the next year to one-half of a percentage 
point below the firm's average annual rate of price increase during 
1976-77. Some industries had abnormally high or low rates of price increase 
during this base period. These extremes are taken into account by limit- 
ing the price increase for an individual firm to no more than 9.5 percent, 
and by regarding any increases of 1.5 percent or less as complying with 
the standard. If increases in hourly labor costs within a firm decelerate by 
more than one-half of a percentage point relative to the 1976-77 rate 
of increase, the deceleration of prices must be commensurately greater to be 
in compliance with the standard. Certain categories of goods and services, 
specified in the price standard regulations issued by the Council on Wage 
and Price Stability, are excluded from the calculation of a company's average 
price change. 

A company that is unable to comply with the price deceleration stand- 
ard because its average price change cannot be calculated, or because of 
uncontrollable price increases in the goods and services it buys, is asked 
to satisfy a two-part profit limitation. The company's profit margin during 
the program year should not exceed the average profit margin for 2 of the 
company's last 3 fiscal years prior to October 2, 1978. Besides this, however, 
program-year profit should not exceed base-year profit by more than 6.5 
percent plus any positive percentage growth in physical volume from the 
base year to the program year. 

Finally, a percentage margin standard is available to companies in the 
wholesale and retail trade and in food manufacturing and processing indus- 
tries as an alternative to the price standard. Details on this alternative are 
provided in the regulations issued by the Council on Wage and Price 
Stability. 

Real Wage Insurance 

One of the obstacles to the success of voluntary wage and price 
standards is fear on the part of each group of workers that their observance 
of the wage standard could lead to a loss of real income if others do not 
cooperate, or if uncontrollable events, such as a serious crop shortage, 
result in price increases. Faced with such uncertainty, and basing their 
price expectations on recent patterns of inflation, many workers might be 
reluctant to cooperate with the standards program. To improve the accept- 
ability of the standards, the Administration is proposing to the Congress an 
innovative program of real wage insurance for those who observe them. 

Under the real wage insurance proposal, employee groups that meet the 
7 percent pay limitation would receive a tax credit if the consumer price 
index increased by more than 7 percent over the year. The rate of the tax 

82 



credit would be equal to the difference between the actual increase in the con- 
sumer price index and 7 percent, up to a limit of 3 percentage points (10 
percent inflation). This rate will be applied to each employee's wages up 
to a maximum of $20,000 per job. Employee groups that are exempt from 
the pay standard (low- wage workers and those under existing collective bar- 
gaining contracts) will qualify for real wage insurance if their average pay 
rate increase is 7 percent or less during the program year. 

The most important factors determining the cost of the wage insurance 
program are the rate at which workers participate in it and the rate of 
inflation. Compliance with the standards by firms and employees will reduce 
labor costs, and price increases should move down correspondingly. But there 
are other, less predictable factors that influence the overall rate of inflation, 
such as changes in the prices of food and fuel, in exchange rates, and in 
productivity. The uncertainty surrounding the behavior of these factors 
means that the cost of the program itself is uncertain. 

With reasonable assumptions concerning participation and the likely be- 
havior of other economic factors influencing inflation, we can arrive at gen- 
eral estimates of the program's cost. Some 87 million workers are potentially 
eligible for the program, although not all are likely to qualify for the wage 
insurance. For example, low-wage workers and those covered by existing 
contracts are exempt from the pay standard. Given expected 1979 wage in- 
creases for these groups, most workers who are exempt from the pay standard 
are unlikely to qualify for real wage insurance. Estimates of the cost of the 
program thus depend in part on assumptions concerning the likely com- 
pliance of workers who are not exempt from the standard. 

If three-fourths of those workers are in compliance, the real wage insurance 
program would result in a budget cost of approximately $5 billion for each 
percentage point of inflation in excess of 7 percent. Lower compliance by 
nonexempt employee groups would raise the expected inflation rate but lower 
the number of workers eligible for the tax credit. In this sense the potential 
budgetary impact of the insurance program is self-limiting. 

As noted above, the expected budgetary cost of the program will also 
depend importantly on productivity growth and the behavior of food and 
energy prices. Estimates of the budgetary impact, adjusted for the expected 
response of the consumer price index to the oil price decisions reached by the 
OPEC cartel in December 1978, appear in Table 18. 

With three-fourths compliance by employee groups who are not exempt, 
the expected budgetary cost of real wage insurance would vary principally 
with productivity and food price developments, as shown in Table 18. With 
full compliance, the most likely payout would be zero, since price increases 
should be less than 7 percent under each combination of food price and 
productivity assumptions in the table. As a result, even without the incentive 
provided by real wage insurance, substantial compliance with the standards 
would yield a significant reduction of inflation and a gain in real wages. 

83 



Table 18. — Estimated annual budgetary cost of real wage insurance proposal 

[Billions of dollars] 



Assumed food price increase 



Assumed productivity growth 



0. 6 percent 1. 1 percent 



8 percent.. 
10 percent. 



'2.5 
4.5 




2.0 



i This is the estimate in the fiscal year 1980 budget and is based on the current forecast for food price increases and 
productivity growth. 

Note.— Calculations assume three-fourths compliance by nonexempt employee groups. 
Source: Council of Economic Advisers. 

Real wage insurance is a novel use of incentives to foster wage and price 
restraint. The tax credits are not designed to compensate, on a straight 
dollar-and-cents calculation, those who might have received higher wage 
increases but chose to observe the standards. Even with real wage insurance 
in effect, observance of the standards by particular groups of employees 
requires a recognition of the national interest in individual wage and 
price decisions and an awareness of the long-run gains that everyone can 
enjoy if inflation is reduced. Real wage insurance offers to groups of em- 
ployees not a cash "buy-out" of higher pay increases, but an important pro- 
tection against the major risks associated with compliance. 

Although the proposed program would rely on the tax system to pro- 
vide refunds if inflation exceeds 7 percent in 1979, it is different in pur- 
pose, design, and effect from proposals to index the general revenue system 
in such a manner that the connection between inflation and tax revenues 
would be reduced or eliminated. The overriding purpose of the plan is to 
reduce inflation directly by inducing cooperation with the pay and price 
standards of the anti-inflation program. Tax indexation proposals, on the 
other hand, seek to insulate the tax payments of individuals and corporations 
from the effects of inflation, but they do not reduce inflation. 

Sectoral Problems 

The pay and price standards are designed to be guides for decision-making 
agents who have discretionary power in wage and price determination. Even 
with widespread compliance, however, it will be necessary to supplement the 
standards with special programs tailored to unique inflationary problems in 
some sectors. 

Prices of health care, for example, have generally outpaced overall infla- 
tion, and expenditures for such care constitute a steadily escalating share of 
our national output. Yet the health care industry is not one in which market 
forces can be expected to provide an adequate restraint on price increases. 
The Administration has taken measures to strengthen health planning and to 
encourage growth in Health Maintenance Organization programs, which 
embody incentives to promote cost consciousness. The Administration is also 
seeking a substantial deceleration in the growth of hospital charges, 

84 



which are the largest and fastest growing component of medical care costs, 
through voluntary standards for hospital cost increases. For 1979 the ceiling 
on such increases is 9.7 percent, which implies a deceleration of over 2 
percentage points from current rates of hospital cost increases. The Presi- 
dent will propose to the Congress a legislative initiative on hospital cost 
containment that would establish a hospital cost standard in law. 

Professional workers in the health industry are also subject to the general 
standards for professional fees, which apply to companies providing pro- 
fessional services on a fee-for-service basis. A company will be in com- 
pliance with the standard if the average rate of change in its fees does 
not exceed 6.5 percent and if the increase in the fee for any single service 
does not exceed 9.5 percent. 

Food price changes have accounted for a major part of the recent 
inflation and in general follow a more erratic year-to-year course than other 
prices. At the farm level, price changes are usually the result of weather 
conditions and other supply-side shocks beyond the control of individual 
farming units. The monitoring of these prices will therefore focus on 
overall market trends. Where price increases in particular commodity 
markets exceed the overall inflation rate and are not justified by changes 
in costs, administrative actions to expand supply will be considered. 

At the retail level, individual firms in the food processing and distribu- 
tion sectors will be expected to adhere to the price standards with respect 
to increases in margins. The Department of Agriculture and the Council 
on Wage and Price Stability will cooperate in a joint effort to monitor 
cost, price, and marketing margins. Efforts will be made to ensure that lower 
commodity prices at the farm level are quickly reflected in retail prices. 
Moreover, decisions on 1979 support and import levels have been made with 
careful attention to their impact on inflation. 

REGULATORY POLICY 

Most of the regulatory activities of the Federal Government can be classi- 
fied into two main groups. Social regulation seeks to control threats to the 
environment and to human health and safety that arise as an undesirable by- 
product in the production and use of goods and services. Economic regula- 
tion controls the prices, wages, conditions of entry, or other important eco- 
nomic characteristics of particular industries. While the Administration's 
efforts toward regulatory reform cover many areas, their essential aim is to 
minimize the costs and improve the effectiveness of social regulation and 
to reduce the scope and rigidity of economic regulation. 

Economic Regulation 

The 1978 Economic Report discussed in some detail the current problems 
with economic regulatory programs, indicating that in many industries the 
regulatory structure established in the past is no longer suited to present 
economic conditions. 

85 



The President recognized this difficulty in the case of the airline industry, 
and the Congress agreed by initiating the first deregulation of a major in- 
dustry by legislative action in recent history. Under the Airline Deregulation 
Act of 1978, entry and price regulation of domestic airlines will be phased 
out by 1982 and 1983 respectively. During the transition, the act provides 
much greater freedom and flexibility in entry and fares than was previously 
the regulatory norm. The new law strengthens the already substantial impe- 
tus to competitive forces that the industry was given last year by the Civil 
Aeronautics Board. The board's liberalizing actions on fares and entry pro- 
duced markedly lower fares along with sharp increases in air travel, load 
factors, and airline earnings. The provisions of the new legislation should 
lower prices even more and broaden the variety of services to consumers. 

In the coming year the Administration will support legislation that will 
extend the principles and benefits of airline deregulation to the surface 
transportation industry. The inefficiencies produced by price and entry 
regulation of the trucking industry are well known: empty return trips, 
restrictions on peak-offpeak pricing, anomalous commodity class rates, and 
lack of price competition. For example, in New Jersey and California, 
where such restrictions do not apply, trucking rates for unregulated intra- 
state traffic undercut comparable interstate rates by 10 to 15 percent. 

The current problems with rail regulation are different. Rates of return 
for the rail industry fall below the all-industry average, and the number of 
bankruptcies in the industry has historically been above normal. At the same 
time, the principal rationale for government regulation — protection from 
monopoly — has been eroded by competition from trucks and shifts in popula- 
tion. The financial difficulties thus created have been compounded by In- 
terstate Commerce Commission regulation that tends to slow or prevent 
rail abandonments and to inhibit railroads from reducing rates to meet com- 
petition from trucks and water carriers. The adverse effects of competition 
from other means of transportation and the Interstate Commerce Commis- 
sion's regulation of railroad earnings have been offset up to now by substan- 
tial Federal subsidies. Unless regulation of the rail industry is relaxed, the 
inefficiencies and necessary subsidies are likely to continue to grow. 

Social Regulation 

In recent years social regulation has greatly extended its scope and in- 
creased its complexity. Much of this heightened activity has been in re- 
sponse to growing public concern about an ever-widening range of environ- 
mental, health, and safety problems. It has also been spurred by our in- 
creasing ability to detect potentially harmful health effects from chemicals 
or chemical reactions. Controlling the harmful side effects of economic 
activity produces substantial benefits to society. But it also imposes costs, 
and these have mounted significantly as the scope and stringency of regula- 
tion have increased. 

86 



Our measurement of regulatory costs and benefits is highly imperfect. 
In addition, measures of the benefits from regulatory provisions — such as 
improvements in the environment and in health and safety — are generally 
excluded from the current national income and product accounts. The re- 
sources devoted to producing those benefits are not available for producing 
other outputs. As a society, we accept a tradeoff of lower measured output 
for increases in unmeasured output in the form of general environmental 
quality. 

Once incurred, the costs of regulatory actions enter into the wage- and 
price-setting mechanisms of the economy. Most of the costs of regulatory 
action show up not as governmental budget expenditures, but as increased 
costs to industry. Acceptance of higher prices relative to wages and other 
money incomes is the way in which society pays for the benefits of social regu- 
lation. In fact, however, our economic institutions and measures of prices do 
not distinguish between these sources of price increases and others. Individ- 
uals and groups try to escape paying the costs of regulation by increasing 
wages and other forms of income to match the higher prices. The result is an 
additional round of price increases. But the costs of regulation cannot be 
avoided, and widespread attempts to do so simply add to inflation. 

Both the large impact of government regulation, measured by its costs 
and bnefits, and the way in which the costs add to inflation, highlight the 
responsibility of all branches of government to make sure that regulations 
are both necessary and efficiently designed. This Administration has under- 
taken a number of steps toward that goal. 

Present Efforts 

Effectively managing the regulatory functions of government entails 
two tasks. The first is to improve the design of individual regulations. 
They should be confined to situations where they arc necessary; they should 
set standards that will* meet statutory- objectives without being needlessly 
stringent; and they should minimize the costs of meeting those standards. 
The second task is to view the regulatory- process comprehensively to judge 
how all the regulations being issued will affect costs and prices, the use of 
national resources, and the economic situation of particular industries and 
sectors. 

The effort to improve the cost effectiveness of individual regulations 
began in 1974 with the requirement that regulatory agencies of the executive 
branch analyze the costs and benefits of major new regulatory proposals, as 
part of the process of preparing regulations. In 1978 the President broadened 
this requirement and also took steps to ensure that these analyses were re- 
viewed not only by the regulatory agencies, but by the other economic 
agencies of the executive branch as well. The Regulatory Analysis Review 
Group was created, with representatives from both regulatory and economic 
agencies, to review several of the most important regulatory proposals 
each year. 

87 



During its first year, the review group submitted for the public record 
analyses of five major regulatory proposals having substantial economic 
effects : the acrylonitrile standard and generic carcinogen policy of the Occu- 
pational Safety and Health Administration, the ozone standard proposed by 
the Environmental Protection Agency, the Department of Transportation's 
regulation to provide equal access for the handicapped, and the Department 
of the Interior's surface mining regulations. Analyses of the Environmental 
Protection Agency's new source performance standards for steam electric 
plants and the Department of Energy's proposed coal conversion regulations 
for electric utilities and general industry were in progress at year-end. 

The task of ensuring that regulations do not impose undue costs extends 
beyond the analysis of newly proposed regulations. On March 23, 1978, the 
President issued an executive order requiring agencies to establish a "sun- 
set" procedure for regulations previously issued by the regulatory agencies 
of the executive branch. Under this executive order, each agency must 
periodically review its existing regulations with a view to eliminating those 
that are unnecessary and improving and simplifying others. Agencies must 
publish a semiannual agenda that sets forth the list of regulations to be 
reviewed, including at least one regulation whose economic impact is 
substantial. 

Effective management of the regulatory process must go beyond measures 
dealing with individual regulations. Although the scope of social regulations 
has been expanding rapidly for over a decade, the Federal Government has 
had no process by which the combined social and economic effects of its 
regulatory actions could be assessed. Because of the complexity of the 
problems involved, development of analytical techniques and procedures 
to make such overall assessments and to utilize them constructively will have 
to occur gradually. But in 1978 the Administration took several steps in this 
direction. 

In March 1978 the President ordered the executive branch agencies to 
publish semiannual agendas of forthcoming significant regulatory proposals 
and actions. In October he created a Regulatory Council charged with im- 
proving and using those agendas to create a government-wide calendar of 
scheduled regulations. The council is composed of all executive departments 
and agencies with regulatory responsibility as well as a large number of 
independent regulatory agencies. The calendar itself will present, for the 
first time, not only a timetable of new regulatory proposals and issuances, 
but preliminary data on their objectives and potential costs. As procedures, 
data bases, and analyses are improved, the calendar can provide both the 
regulatory agencies and the Executive Office of the President with a body 
of information for use in examining and assessing the effects of regulations 
and improving overall regulatory management. Using the information and 
analyses developed in producing the calendar, the Regulatory Council itself 
can address problems of coordination and thus eliminate conflicts and dupli- 

88 



cation. In addition, it will begin to examine the problems that have arisen 
in particular industries or sectors from the combined effects of regulations 
imposed by different agencies. 

The measures to improve the regulatory process outlined above are already 
making major contributions, not only increasing the cost effectiveness of 
individual regulations but improving the overall coordination and integra- 
tion of regulatory programs. Additional progress will depend, however, on 
developing satisfactory approaches to a number of other complex and 
difficult problems. 

Balancing Costs Against Benefits 

The statutes authorizing the various social regulatory programs vary 
widely in the degree that they allow the regulatory agencies to balance bene- 
fits against costs in setting regulatory standards. Some statutes dealing with 
the control of damaging health effects from chemicals or other substances 
appear to be based on the proposition that effects are harmful above some 
threshold of concentration but not below it. These statutes, in effect, require 
the regulatory agency to set standards at or just below the presumed thresh- 
old without regard to costs. In fact, scientists are increasingly questioning the 
existence of the presumed thresholds; many believe that health hazards di- 
minish continuously down to zero concentration. Since in many cases flatly 
prohibiting the substance is far too costly or disruptive, any standards that set 
the level of concentration above zero must implicitly take into account a bal- 
ancing of economic and social costs against the prevention of health risks. 

Some regulations are issued under statutes which do not mention balanc- 
ing economic costs against benefits, but do require that the regulatory stand- 
ard be "feasible." Still other statutes not only permit but require economic 
costs to be taken into account. And fiinally there are cases where regulatory 
costs are ignored. For example, the "Delaney Amendment" to the Food, 
Drug, and Cosmetic Act, flatly bans substances used as food additives if they 
have been found carcinogenic in animal tests, regardless of their potency as 
carcinogens or the economic costs that such a ban would impose. 

There is obviously no all-purpose formula for reaching sound decisions 
about the stringency of environmental health and safety standards, given the 
need to take into account both the prevention of health risks and the costs of 
such prevention. Uncertainty is always present in determining the specific 
nature and degree of the health risks from exposure to various substances, 
though the uncertainties in some cases are substantially greater than in others. 
The same is true of costs. In each regulation, a decision must be made about 
how to deal with these uncertainties. Regulators sometimes encounter situa- 
tions where exposure to health risks is very high but occurs among a small 
number of people ; at other times one finds very low exposure among a large 
number of people. Mthough circumstances thus vary considerably from 
case to case, a generally consistent approach to these and similar problems 
by the different regulatory agencies would do much to make the needed 

89 



regulations better and more cost effective. Developing such an approach 
will require coordination among regulatory agencies as well as a careful 
analysis and review of the statutory background behind the different 
regulatory programs. 

Overall Management of the Regulatory Process 

Despite many differences, social regulation shares some of the character- 
istics of the budgetary programs of the Federal Government. Both are de- 
signed to provide economic and social benefits: such things as educational 
services, highways and dams in the case of the budget; and environmental 
improvements and health protection in the case of social regulation. Both use 
national resources that could be diverted to other uses. For the budget the 
resource costs show up as Federal expenditures, which are paid for by taxes. 
The costs of regulations are less visible, since they are imposed on industry 
and paid for by consumers in the form of higher prices. 

The Nation has long had a set of procedures to consider the Federal 
budget as a whole : Costs of particular programs and of the total budget are 
estimated in order to make the best possible qualitative judgments about 
benefits, and priorities among programs are established. Regulatory programs 
have no such established procedures, and as a consequence there is no good 
estimate of the overall cost of regulation. The difficulties of developing such a 
process are formidable. Since program costs in the budget represent money 
actually spent by the government, there is a firm basis for finding out how 
much programs have actually cost, however difficult it is to estimate future 
costs. 

Most regulatory costs, however, are not directly borne by the Federal Gov- 
ernment but by private parties. Moreover, some of these costs, while very real, 
can only be roughly estimated even after they have actually occurred. What, 
for example, are the costs of requiring a firm to locate at point M instead of 
point N, or of requiring that chemical Z no longer be used as a pesticide? 
Such estimates are necessarily subject to dispute. And, not unnaturally, 
people who place a high value on the benefits of the particular regulation 
tend to arrive at low estimates, while those who must pay the costs tend to 
make high estimates. 

In addition, social regulation is carried out under a large number of 
statutes, many of which state quite specifically the objectives to be reached, 
the deadlines for reaching them, and the factors that must be considered in 
setting regulatory standards. The executive branch has much less flexibility 
in asserting priorities and deferring or speeding up the issuance of regulations 
on the basis of economic conditons and social needs than in managing many 
budgetary programs. 

More generally, the relationship between the Congress and the executive 
branch in the case of budget programs is quite different from that in the 
regulatory process. Although the President has flexibility in determining the 
priorities among budget programs and the size of the recommended expendi- 

90 



tures each year, the Congress must pass on the appropriations to carry out 
those programs. Once a regulatory statute is passed, the executive branch 
agencies do not have to come back to the Congress each year, and they may 
issue regulations that confer important benefits and impose large costs with- 
out congressional approval. On the other hand, the statutes under which most 
regulation occurs tend to be extremely specific, often limiting the ability of 
the President and the heads of executive agencies to determine priorities and 
otherwise balance costs against benefits among and within the various 
regulatory agencies. 

For all of these reasons the development of procedures and techniques 
to improve the overall management of the Federal regulatory process, to 
achieve social gains at minimum cost, and to reduce the inflationary con- 
sequences of regulatory activities will have to be a long and carefully executed 
process. It should proceed step by step and involve both the Congress and the 
executive branch. Several important gains have already been made. Accord- 
ing to polls, the public continues to believe that improvements in the environ- 
ment, in health, and in safety are an important national goal. But recently 
this sentiment has been accompanied by a growing recognition of the very 
large costs and the inflationary effects of regulation. The effort to improve 
both the cost effectiveness of individual regulations and the overall manage- 
ment of the regulatory process will continue to be a top priority of this 
Administration. 



91 



CHAPTER 3 

The Economic Outlook 

TN 1979 THE ECONOMY will enter its fifth consecutive year of 
-*- economic growth, making this the second longest recovery in postwar 
history. As a recovery matures, sustaining a satisfactory pace of expan- 
sion becomes more difficult. Housing, in which starts have more than 
doubled since early 1975, is only one example. Given current demographic 
trends, a high level of starts is sustainable, but housing could not be ex- 
pected to add much to growth even under the most favorable circum- 
stances in financial markets. The saving rate has fallen to very low levels 
by historical standards, and the rise of consumption may consequently drop 
behind the growth of disposable income. In addition, business fixed invest- 
ment in real terms has already regained its prerecession ratio to gross 
national product (GNP), and hence a slower growth of business capital 
expenditures is likely. All these factors will combine to check the pace of 
economic expansion next year. 

As Chapter 2 makes clear, a reduction in economic growth from the 
rate of the last 2 years is needed both because idle labor and capital re- 
sources have been cut considerably and because inflation has accelerated. 
The task for aggregate demand policies will be to provide a climate in which 
inflationary pressures can begin moderating, but to avoid restraint so severe 
as to generate a recession. 

THE ECONOMY IN 1979 AND 1980 

Real growth is projected to average about 2}4 percent for the 4 quarters of 
1979, a lower growth rate than in 1978 but positive throughout the year. If 
the anti-inflation program succeeds, as is anticipated, the rate of growth 
of consumer prices should slow to less than 7/2 percent over the 4 quarters 
of 1979, and to an annual rate of slightly under 7 percent by the end of the 
year. According to initial indications, business and labor groups are taking 
the President's voluntary standards seriously, but success cannot yet be as- 
sured. Widespread compliance with the anti-inflation program is essential 
to maintenance of a strong and healthy economy. 

92 



In 1980, real growth is expected to rise to a rate of 3% percent 
over the 4 quarters, largely as a result of an upturn in housing, while infla- 
tion will continue to slow, dropping below 6/2 percent. Here also success in 
the fight against inflation will contribute materially to sustaining economic 
growth by reducing the pressures on credit markets and strengthening con- 
fidence among consumers and businesses. 

Employment is expected to rise by about 2 million a year in both 1979 and 
1980. Productivity is expected to grow at about the same rate in 1979 as 
in 1978, with some improvement in 1980. It is likely to remain well below 
its trend rate of increase of about 1 5/2 percent. With the labor force expected 
to continue growing at a rate above the long-term trend and real growth 
slowing, the unemployment rate is likely to increase to 6 ! /4 percent by the end 
of 1979 and remain near that level in 1980. 

FISCAL POLICY FOR 1979 AND 1980 

The course of fiscal policy that is appropriate for 1979 and 1980 
was described generally in Chapter 2. In specific terms, Federal outlays are 
projected to be $493 billion in fiscal 1979, an increase of over 9 percent from 
the previous year. In fiscal 1980 the President's budget calls for outlays of 
$532 billion, an increase of less than 8 percent. This 1980 figure includes 
a small real increase in defense spending, a constant level of real spending 
for domestic programs, and restraint in or deferrals of new spending ini- 
tiatives. Because existing legislation mandates continued real growth in some 
programs, such as health care and social security, zero real growth in do- 
mestic spending can be achieved only through reductions in real outlays for 
a number of other programs. Holding outlays to $532 billion will require 
strenuous efforts by government agencies as well as cooperation from the 
Congress. 

Over a year ago forecasts of economic activity suggested that the current 
economic expansion would slow too much unless the burden of rising taxes 
was eased. Inflation and economic growth were pushing people into higher 
tax brackets, and substantial increases in social security taxes had been legis- 
lated for 1979 and later years. To prevent too great a check on the ex- 
pansion, these tax increases would have to be offset by a tax cut. A tax cut 
was also needed to encourage the investment that would provide the produc- 
tive capacity for future economic growth and improve the prospects for 
greater growth in productivity. 

Last January, the President therefore proposed a tax cut of $25 billion to 
take effect October 1, 1978. Since inflation was higher than expected, this 
was scaled back in May to a cut of $20 billion to take effect January 1, 1979. 
The size of the tax bill passed by the Congress is close to this request with a 
stimulus of $18.9 billion in 1979. The bill contains a $14.1 -billion cut in 
personal taxes, a $6.5-billion cut in business taxes, and a $0.7-billion increase 
in outlays for the earned income tax credit, but allows $2.5 billion in jobs 
credits to expire. 

93 



The Revenue Act of 1978 

The Revenue Act of 1978 achieves cuts in individual income taxes largely 
by lowering the schedule of tax rates. It replaces the general tax credit, 
which was due to expire at the end of 1978, with an increase in the 
personal exemption from $750 to $1,000. The legislation also expands the 
earned income tax credit for the working poor and lowers the tax rates on 
capital gains. Its provisions include some of the tax reform proposals made 
by the President in his tax package. 

In general the Revenue Act of 1978 will have relatively little effect on 
the after-tax distribution of income. Most households will receive a cut in 
tax liability of about 7 percent. Households with incomes above $200,000 
and those with incomes below $10,000 will receive larger cuts. These distri- 
butional effects contrast sharply with those of the President's tax proposal, 
which called for larger tax cuts for those with incomes below $30,000 and 
smaller reductions for those with incomes above $30,000. In its effects the 
1978 legislation will also differ markedly from income tax legislation enacted 
between 1964 and 1978, which increased the progressivity of the tax system. 

The business tax cuts in the 1978 Revenue Act are attained primarily by 
lowering corporate income tax rates. The maximum rate is dropped from 
48 to 46 percent, and a new tax schedule, with more income brackets and 
lower tax rates, is introduced. The tax rate on corporate income between 
$50,000 and $75,000 is cut the most, from 48 percent to 30 percent. The legis- 
lation also extends and expands the investment tax credit, providing a 
$500-million tax cut for business in 1979. Both of these cuts were in the 
package proposed by the President. Capital gains tax rates were also lowered 
in the 1978 legislation, reducing revenues by nearly $2 billion in 1979. 

MONETARY POLICY 

The combined effects of rising inflation and efforts by the Federal Re- 
serve to hold down the growth of the monetary aggregates carried interest 
rates last year to near record levels. More restrained growth of the monetary 
and credit aggregates is an appropriate complement to the other parts of the 
anti-inflation program. It will help to moderate the rate of economic ex- 
pansion. Additionally, higher U.S. interest rates make dollar-denominated 
assets more attractive than those denominated in foreign currencies and 
thus contribute to sustaining the value of the dollar in exchange markets. 

Many private forecasters anticipate a recession in 1979, partly because 
they expect that current high interest rates will substantially depress housing 
and business investment. High interest rates are likely to dampen aggregate 
demand in 1979, but to a lesser degree than one would expect from past 
experience because of institutional changes in financial markets. Our judg- 
ment that economic growth in 1979 will be sustained reasonably well and 
that a recession will be avoided depends in part on our analysis of why the 
effect of monetary restraint is different from what it used to be. 

94 



During most of the postwar period, intervals of substantial monetary 
restraint were followed by recessions. Curbing aggregate demand through 
the use of monetary restraint disrupted financial markets because the deposi- 
tory institutions experienced a large outflow of deposits when interest rates on 
market instruments rose above the rates these institutions were permitted to 
pay to attract consumer savings. This disintermediation sharply reduced the 
availability of credit for those borrowers most dependent on commercial 
banks and thrift institutions for credit. These included small businesses and 
some units of State and local government, but the sector most severely hit 
was the mortgage market. As mortgage credit became not merely more ex- 
pensive but unavailable, residential construction dropped precipitously, and 
this sharp drop was often important in tipping the entire economy into 
recession. 

Table 19 shows periods of such cyclical declines in acquisitions of mort- 
gages by financial institutions and the associated declines in single-family 
and multifamily housing starts. In the 1965-66 period the sharp decline 
in residential construction contributed to a slowing of overall eco- 
nomic growth, but the expansion of Federal outlays was sufficiently 
strong to maintain economic expansion. The 1959-60, 1969-70, and 
1972-74 episodes were all followed by recessions. Of course, factors other 
than the decline in housing were also involved in each of these recessions, 
but the speed with which the decline in housing occurred had a destabilizing 
effect for which it was difficult to compensate elsewhere in the economy. 

Table 19.— Cyclical contractions in mortgage credit and housing starts, 1959-74 
(Percent change at seasonally adjusted annual rate, except as noted) 





Interest 
rate 1 


Mortgage 

acquisitions 


Housing starts 


Period 


Single-family 

-17.3 
-28.5 
-23.1 
-22.9 


Multifamily 


1959 II to 1960 II .... 


1.27 
1.41 

1.35 
3.36 


-12.7 
-28.9 
-28.2 
-24.8 


-16.4 


1965 III to 1966 IV... . 


-36.1 


1969 1 to 1970 1 


-30.1 


1972 IV to 1974 IV 


-53.2 







1 Percentage point change in the quarterly average market yield en 6-month Treasury bills from the beginning of the 
period to the peak reached during the period. 
- Acquisitions by financial institutions. 

Sources: Department of Commerce (Bureau of the Census), Board of Governors of the Federal Reserve System, and 
Federal Home Loan Bank Board. 



The first half of last year was somewhat like earlier periods of credit 
restraint. Short-term market interest rates rose well above rates payable 
on deposits. As shown in Table 20, deposit inflows at thrift institutions 
slowed, and so did their mortgage lending. In the second half of the year, 
however, deposits again began to grow rapidly. 



95 



Table 20. — Growth in deposits, 1977-78 
(Percent change, seasonally adjusted annual rate <l 



Type of deposit 


1977 


1978 




1 


II 


III 


IV 


1 


II 


III 


IV» 




9.5 
7.6 
17.3 
8.4 
-3.2 

14.0 
20.9 
13.8 
25.8 


8.7 
7.5 
5.6 
13.1 
7.3 

12.5 
14.8 
8.4 
19.3 


9.8 
8.9 
11.3 
11.3 
3.2 

17.7 

15.4 

8.5 

20.0 


12.1 
5.5 
1.5 

14.2 
81.0 

12.8 
10.7 
3.6 
15.4 


10.0 
3.9 
2.6 
12.0 
50.8 

8.1 
13.3 

7.3 
17.1 


10.4 
12.6 
1.3 
11.9 
25.0 

8.2 
10.0 
-4.3 
19.3 


10.5 
9.2 
4.6 

18.1 
6.6 

14.6 

12.0 
-6.9 
24.0 


7.7 


Demand 


-3.1 
-6.9 


Other time ... _ ._ 

Large certificates of deposit (CDs) 

Nonbank thrift institutions, total 

Savings and loan associations 

Passbook 

Other 


20.4 
47.0 

11.6 







1 Changes are measured from end of quarter to end of quarter. 

2 Preliminary. 

Sources: Board of Governors of the Federal Reserve System and Federal Savings and Loan Insurance Corporation. 

As discussed in Chapter 1, the principal reason for this higher growth 
was the new regulation that permitted the issuance of money market cer- 
tificates beginning last June. This change followed upon similar, but much 
smaller, steps taken in 1970 and 1973. In those instances interest ceilings 
were raised on longer-term certificates of deposit, thus reducing somewhat 
the vulnerability of thrift institutions to deposit outflows. (Passbook and 
shorter-term certificate ceilings were also raised slightly in 1970 and 1973.) 

Other less obvious institutional changes have also modified the response 
of the economy to credit restraint. One of these is the expansion of secondary 
mortgage market activity. The Federal Home Loan Mortgage Corporation, 
established in 1970, issues its own mortgage-backed securities and purchases 
mortgages from the thrift institutions. The Government National Mortgage 
Association has developed a procedure whereby it guarantees securities that 
are issued by private institutions and backed by pools of mortgages insured 
by the Federal Housing Administration or guaranteed by the Veterans 
Administration. These securities have been purchased by a broad range of 
investors, many of whom were not previously in the mortgage market. Some 
thrift institutions have also begun issuing their own bonds, for which 
mortgages serve as collateral. 

Institutional changes have also occurred in other financial markets. 
Commercial banks no longer depend primarily on liquidating U.S. Gov- 
ernment securities to obtain funds for business lending, as they had 
done through the early part of the postwar period. The advent of lia- 
bility management (exemplified by the issuance of negotiable certificates 
of deposit and the use of nondeposit sources of funds) has enabled most banks 
to obtain the funds they want for lending, provided they are willing to pay 
going rates of interest. Moreover, large firms can increasingly shift their 
borrowing between commercial banks and open market commercial paper, 
and between foreign and domestic sources, in response to differences in 
the cost and availability of funds. Their direct access to credit markets makes 
them less dependent on intermediation by institutional lenders. The expan- 

96 



sion of trade credit provides a mechanism through which large firms extend 
this benefit to smaller customers and suppliers. 

The result of these institutional changes has been to smooth the response 
of the economy to increased restraint in financial markets. In place of sharp 
changes in availability of credit, there is now a more gradual response of 
credit users to changes in the cost of credit. Measured application of monetary 
restraint has become more feasible. The degree of restraint required to 
achieve the desired growth in private demand is difficult to judge, however, 
because the response of the private sector is likely to occur more slowly 
and to be diffused more widely than in the past. Moreover, the indicators 
showing the degree of restraint have changed, and experience in implement- 
ing monetary policy under present circumstances will come only gradually. 

Over the near future, nominal interest rates are likely to remain relatively 
high by historical standards. It will take time to reduce the rate of inflation 
and the inflation premiums contained in interest rates. As inflation recedes, 
the maintenance of a restrained monetary policy will be consistent with a 
decline in nominal interest rates. 

THE ECONOMIC FORECAST 

The economy is entering 1979 with substantial momentum, and economic 
expansion will be bolstered by the recently enacted tax bill, which will help 
to sustain consumer expenditures during the first half of the year. Later 
in the year, as the effect of the tax cut wears off, a slower expansion of 
consumer purchases is foreseen. Partly as a response to current high interest 
rates, housing starts are expected to decline and the growth of business fixed 
investment to diminish during the year (Table 21). 

Table 21. — Economic outlook for 1979 



Item 



Growth rates, fourth quarter to fourth quarter (percent): 
Real gross national product 



Personal consumption expenditures 

Nonresidential fixed investment 

Residential investment 



Federal purchases 

St;te and local purchases. 



GNP implicit price deflator 

Compensation per hour 2 ... 
Output per hour - 



Level, fourth quarter: 3 



Unemployment rate (percent) 

Housing starts (millions of units <)- 



1978' 



4.3 



3.8 
8.3 



-.3 

3.5 



8.3 



9.8 
.5 



5.8 
2.1 



Forecast 
range 
1979 



2 to 2H 

l**to 2K 

4 to 4^ 

-m to -m 

Jito VA 

\K to 2% 

7)i to 7H 

8)i to Sh 

HXo *A 



6 to 6^ 
\X to \*A 



' Preliminary. 

2 Private business sector; all persons. 

3 Seasonally adjusted. 

* Annual rate. 

Sources: Department of Commerce (Bureau of Economic Analysis), Department of Labor (Bureau of Labor Statistics), 
and Council of Economic Advisers. 



97 



Growth is likely to be stronger in the first half of the year than in the 
second half. Housing starts are expected to bottom out during the fourth 
quarter of 1979 and begin to move up in 1980 as pressures in money and 
credit markets ease with the decline in the rate of inflation. The upturn in 
housing is a principal reason for the anticipated increase in the rate of eco- 
nomic growth in 1980. 

The rate of increase of the GNP deflator is expected to decline from 8.3 
percent in 1978 to slightly under 7/ 2 percent during the 4 quarters of 1979; 
a further drop to just under 6/ 2 percent is probable during 1980, partly as 
a result of a tightening of the pay and price standards. Inflation is likely to 
remain high during the first half of 1979, however, because of the minimum 
wage increase in January, the delayed effects on import prices of the decline 
in the value of the dollar, the oil price increases by the Organization of 
Petroleum Exporting Countries (OPEC), and the continued rise in food 
prices. As the year proceeds, these factors will put less upward pressure 
on prices, and the effects of the President's anti-inflation program should 
be increasingly felt. Consequently the increase in consumer prices is expected 
to fall to an annual rate of below 7 percent by late in the year. 

Consumption 

Consumption has been a major source of strength in the current expansion. 
Consumers have increased their spending by more than the rise in their 
after-tax incomes, reducing the saving rate from almost 8 percent in 1975 
to under 5 percent in the last quarter of 1978. Some of the possible reasons 
for this low saving rate were discussed in more detail in Chapter 1 . 

In 1979 the saving rate is expected to rise moderately but remain well 
below its 6 percent average of the 1950s and 1960s. Much of this increase 
will reflect less intensive use of consumer credit, which expanded sharply 
during 1978. Automobile sales in particular are not likely to rise further in 
1979 and may fall slightly from the high level of the 1978 model year. 
Purchases of furniture and household equipment may also decline as a 
result of the expected reduction in residential construction. 

Continued growth in purchases of nondurables and services should allow 
personal consumption expenditures to rise in real terms at a rate of about 2 
percent, close to the projected rate of growth of real GNP but below the 
rate of increase in real disposable income. 

As inflation abates during 1979, consumer confidence in the economy 
should improve and thus strengthen consumer markets in 1980. The saving 
rate is consequently expected to decline in 1980. During that year, however, 
rising effective tax rates will tend to slow the growth of disposable income ; 
the increase in consumer spending is thus likely to be somewhat less than the 
rise in real GNP. 

98 



Business Fixed Investment 

Business fixed investment in 1972 dollars should grow at a rate of about 4 
percent during 1979, measured from fourth quarter to fourth quarter. This 
estimate represents a slowdown from the 8.3 percent increase for 1978, but 
the increase is still above the expected growth in real GNP. Investment is 
foreseen to remain relatively strong in the first half of 1979 but to slow later 
in the year with the rest of the economy. Moderate improvement from the 
less rapid rate of the second half of 1979 is expected during the course of 
1980. 

Indicators of the probable pace of investment next year are mixed. Higher 
rates of capacity utilization are encouraging new and replacement invest- 
ment, and contracts and orders for plant and equipment are rising rapidly. 
Orders for nondefense capital goods in October and November were 1 2 J/2 
percent above their third quarter level. Unfilled orders for nondefense capital 
goods at the end of November stood 6 percent above their September level. 

Moreover the Revenue Act of 1978 should provide some encouragement 
for business fixed investment. Profits seem likely to remain relatively high 
throughout the next year, falling only marginally from their current share 
of GNP. The confidence of investors with regard to future inflation should 
improve as the Administration's anti-inflation initiatives take hold. 

Not all the forces influencing business investment decisions are positive. 
Expectations of a slowdown in economic activity next year are widespread 
and may already be holding back investment plans. Nominal interest rates 
have risen to very high levels, and their effects will be felt increasingly as 
1979 progresses. Some reduction in investment in motor vehicles may also 
follow the recent large purchases of cars and trucks by businesses. This drop 
in sales may restrain discretionary capital spending by the auto industry, 
although the industry will still have to maintain a high level of capital out- 
lays to meet the requirements of government regulations. 

The latest Commerce Department survey of business investment inten- 
tions found that businesses are planning to increase their outlays for new 
plant and equipment in 1979 by 11.2 percent in current dollars. This com- 
pares with an actual rise of 12.7 percent in 1978. If capital goods prices rise 
in 1979 by the 8 percent figure expected by survey respondents, the real in- 
crease in outlays for plant and equipment in 1979, measured on a year-over- 
year basis, would be about 3 percent. Measured from fourth quarter to 
fourth quarter, the increase would be less. 

In the past 3 years total outlays for business fixed investment in the na- 
tional income and product accounts have exceeded the amount included in 
the plant and equipment survey by a large and widening margin, even after 
allowance has been made for conceptual differences in coverage of the two 
series. This margin may well persist in 1979. The results of the Department 
of Commerce survey thus seem consistent with our forecast, which calls for 
a moderate slowdown this year in this key element of aggregate demand. 

99 



Housing 

The number of housing starts and the real volume of residential con- 
struction are likely to decline in 1979 from the high levels of last year, in 
large part because prospective home buyers will be deterred by the high level 
of mortgage interest rates. In areas where mortgage rates are limited by 
usury ceilings, some constraints have developed on the availability of credit. 
This should not greatly affect the national total of housing starts, but it 
may restrain housing sales and residential construction in some parts of the 
country. By the fourth quarter of 1979 housing starts are expected to fall 
to an annual rate of around 1% million or somewhat less, a decline that 
is significant but less steep than in most postwar periods of tight money. 

The prospects for housing this year will depend importantly on whether 
thrift institutions continue to attract funds through money market certifi- 
cates and to make the proceeds available to potential home buyers. Margins 
between mortgage yields and the cost of issuing the certificates have nar- 
rowed. Some thrift institutions may therefore pay less than the maximum 
permissible yield on money market certificates and in other ways market 
them less aggressively. Moreover, there may be some diversion of funds from 
mortgages to higher-yielding short-term liquid assets. The potential for 
strengthening longer-term earnings by issuing money market certificates 
and acquiring long-term, high-yield mortgages in such a period is nonetheless 
attractive. 

The effect of these new money market certificates in reducing current 
earnings of thrift institutions is a matter of concern. However, the certificates 
still represent a small proportion of total deposits (less than 10 percent at 
year-end ) . Moreover, at least half of the money going into the money market 
certificates appears to be coming from outside the thrift institutions, and 
some of the remainder is being converted from high-yielding certificates 
rather than from low-yielding passbook accounts. In view of the high level 
of earnings on the mortgage portfolio — about 8/2 percent in the second half 
of last year — thrift institutions in general are in a favorable position to cope 
with higher deposit costs for a limited time, although the earnings and cost 
positions of individual institutions undoubtedly vary considerably. 

Given reasonable prospects for the availability of mortgage credit, the 
primary determinant of the volume of housing starts will be the response of 
home buyers and builders to the higher level of mortgage interest rates. The 
rate on new mortgage commitments had risen sharply to nearly 1 1 percent 
by the end of last year. 

Virtually all of the projected decline in housing starts is likely to be in 
single-family units. Following last year's upturn, construction of multifamily 
units will probably level out in 1979 in response to the high costs for 
building loans, which often have to be carried a long time. But the decline 
in the rental vacancy rate from a peak of 6.2 percent in 1974 to a historically 

100 



low level of 5.0 percent late last year implies a strong demand that should 
sustain multifamily construction. 

The demand for single-family homes will also be supported by demo- 
graphic factors. Between 1973 and 1978 the number of people in the 25-29 
age group grew by 16 percent, and the 30-34 group grew 22 percent. By 
1983, population in these two age groups is expected to rise nearly 14 
percent, somewhat below the rate of the last 5 years but far above the 
rates prevailing before 1970. In fact the population in this age group will 
grow more in the next 5 years than it did in the 15 years up to 1970. The 
largest number of first-time home buyers is in the 25-34 age bracket. More 
than half of the married couples aged 25 to 29 and nearly three-fourths of 
those between 30 and 34 own their own homes. Although the proportion 
of married couples in the total number of U.S. households has been declin- 
ing, this change has been offset by the rise in homeownership among single 
persons. 

Given the favorable demographic trends and low vacancy rates, it is quite 
likely that housing starts will begin to rise as inflation and nominal interest 
rates case late next year. The forecast anticipates a rise in housing starts to 
about 1.9 million units by the fourth quarter of 1980. Residential construc- 
tion is expected to add nearly as much to real GNP growth in 1980 as it 
subtracted in 1979. This projected turnaround in housing activity is the 
principal reason for expecting somewhat stronger economic growth in 1980. 

Inventories 

Businesses throughout this recovery have pursued a cautious policy on in- 
ventory accumulation, as noted in Chapter 1. Ratios of inventories to sales 
have been kept relatively low for this stage of the recovery, and there are 
no major inventory imbalances that would depress economic activity this 
year. Since growth in final sales is expected to moderate in 1979. however, 
the rate of inventory investment may decline slightly if businesses continue 
to pursue their conservative inventory policies, as seems likely. Heightened 
inventory accumulation may occur in 1980 as final sales again become 
stronger. 

Net Exports 

During 1978, for the first time in this recover)', the foreign sector provided 
some support to the expansion of GNP. The volume of exports rose, and the 
growth of import volumes slowed from its rapid pace at the beginning of 
the year. The foreign sector should continue to contribute to growth in 1979. 

In many foreign countries, growth of domestic demand began to pick up 
during the course of 1978, and this movement should increase somewhat 
more this year, chiefly because of a shift toward more expansionary fiscal 
policies in Germany and Japan in late 1978. More rapid growth of foreign 
demand will help to raise demands for U.S. exports. At the same time, the 

101 



deceleration of growth in the United States is acting to reduce the growth 
of import volumes. In 1979, for the first time since 1975, growth rates in 
the major foreign countries are likely, on average, to exceed growth in the 
United States. 

The marked depreciation of the dollar from September 1977 through 
October 1978, which has been only partially reversed since then, will also 
help to improve our net exports in 1979. Since trade volumes adjust only 
slowly to changes in relative prices, the principal effects of the dollar 
depreciation on imports and exports are not yet evident. 

U.S. exports tend to respond more strongly to relative price shifts than 
imports do, but with longer lags. Exports of nonagricultural merchandise in 
1972 dollars are expected to grow by 7 to 10 percent in 1979; agricultural 
exports, on the other hand, are not likely to increase from current high 
levels. Slower economic growth in 1979 and last year's depreciation of the 
dollar should limit the rise in the volume of non-oil imports this year. Despite 
an expected rise in the volume of oil imports, the merchandise trade bal- 
ance should improve in 1979. 

An important development in the structure of our foreign balance over 
recent years has been a marked surplus in net exports of services, especially 
fees, royalties, and earnings of American enterprises abroad. In the early 
years of this decade the United States was near balance on services, but in 
1977 the service component of the current account showed a surplus of 
$16 billion, and the surplus rose to an annual rate of $18 billion in the first 3 
quarters of 1978. In the near future this trend should continue, since the 
comparative advantage of a mature industrial country like the United 
States will increasingly lie in exporting capital and technology. 

Government Demand 

Purchases of goods and services by both the Federal and the State and 
local sector will rise in 1979 and 1980, but the amount of growth will be 
relatively small in real terms. 

The President's budget calls for Federal outlays of $493 billion in fiscal 
1979 and $532 billion in the next fiscal year. Purchases of goods and serv- 
ices, comprising roughly one-third of these expenditures, are concentrated 
in defense outlays, where Federal expenditures are projected to rise in real 
terms. Total real Federal purchases are expected to increase 1 percent during 
1979 and to fall slightly during 1980. The 1979 increase follows a small 
decline in real Federal purchases during 1978. 

Although State and local purchases will continue to grow in real terms 
during 1979 and 1980, two recent developments indicate a slowing in the 
rate of increase from the 3/ 2 percent rate of 1978. First, as Chapter 1 noted, 
sentiment among voters appears to favor limiting the growth of State and 
local taxes and expenditures, as evidenced by the passage of Proposition 13 

102 



in California and successful budget-cutting referenda in eight other States 
in 1978. Second, Federal aid to State and local governments, which had 
been growing rapidly, will level off over the next 2 years. 

These developments suggest that the rate of growth in real State and local 
purchases may moderate to about a l/ 2 to 2 percent annual rate over the 
next 2 years. The operating balance of the State and local sector, which was 
in surplus by about $6.6 billion in 1978, is expected to shift to a small 
deficit in 1979 and 1980. 

Labor Force and Employment 

Growth in the labor force and in employment cannot be expected to 
continue at the exceptionally rapid rates of the past 3 years. The slower 
rate of real economic growth foreseen for 1979 and 1980 and trends in 
the age structure of the population make it reasonable to expect growth 
rates for both labor force and employment to decline toward their long-term 
trend. 

The civilian labor force has grown at an annual rate of about 2% percent 
over the past 3 years, up from an average around 2% percent in the first 
5 years of the decade. This recent pace is much more rapid than the 
average annual growth of 1.7 percent during the past 30 years. There have 
been two principal reasons for the relatively high growth of the labor force 
lately. The number of persons between the ages of 16 and 24, the normal 
age for entering the labor force, is large because of the peak birth rates in 
the late 1950s; and a higher proportion of women and teenagers have joined 
the labor force. Reductions in the size of the Armed Forces were also a factor 
in the earlier part of the decade. In the past 3 years the labor force partici- 
pation rate has gone up a full 2 percentage points. The rapid expansion of 
employment opportunities during this period has undoubtedly had an im- 
portant bearing on this striking increase. 

In 1979 and 1980 the factors outlined above are expected to have less 
effect on labor force expansion. The rate of growth in the noninstitutional 
population at ages 16 and older will decline from the 1.7 percent per year 
average of the early and middle 1970s to 1.5 percent in 1979 and 1.4 percent 
in 1980. Slower growth of real output will cause the participation rate to 
rise less rapidly, but it may remain above its long-term average annual growth 
of 0.2 percentage point. The growth rate for the civilian labor force is 
expected to average about 2J4 percent per year in 1979 and 1980. 

The rate of increase in employment will be limited by slower growth in 
real aggregate demand. Average employment in the fourth quarter of 1979 
should be about 2 percent above that in the fourth quarter of 1978. Employ- 
ment growth during 1980 is expected to be about 2}4 percent, compared to 
an average annual employment growth in the preceding 3 years of over 3/2 
percent. 

103 



These projections concerning employment and the labor force imply a 
small rise in the unemployment rate. Unemployment is expected to increase 
to about 6^4 percent of the labor force by late 1979 and to remain near that 
level in 1980. Forecasts of unemployment rates must be regarded as highly 
uncertain, however, because of the difficulties inherent in predicting growth 
in the labor force, in productivity, and in output. 

PRICE AND WAGE DEVELOPMENTS 

The outlook for prices and wages in 1979 is affected in important ways 
by the Administration's anti-inflation program. A significant reduction 
of inflation will require widespread cooperation and compliance with the 
wage and price standards. 

The wage standard limits increases in compensation generally to 7 per- 
cent, but even with full compliance by groups not exempt the rise in pri- 
vate compensation is likely to exceed 7 percent. Equity and flexibility re- 
quire some groups to be exempt from the pay standard, including workers 
who are covered by collective bargaining agreements negotiated before the 
announcement of the anti-inflation program on October 24, 1978, and those 
who were earning less than $4.00 per hour on October 1, 1978. Many 
workers qualifying for the low-wage exemption received substantial in- 
creases on January 1, when the minimum hourly wage was raised from 
$2.65 to $2.90 as a result of the 1977 amendments to the Fair Labor Stand- 
ards Act. Others in this group may be indirectly affected if wages slightly 
above $2.90 are raised to maintain normal wage differentials. On average, 
wages and private fringe benefits of those qualifying for the low-wage exemp- 
tion are expected to increase between 8/2 and 8% percent. 

Deferred increases in compensation due in 1979 under existing collective 
bargaining agreements are also exempt. These increases vary considerably, 
but the average, including allowance for cost-of-living provisions, is likely 
to be in the &/$ to 8/2 percent range. 

New labor contracts will play an important role in wage changes in 1979 
when a new round in the 3-year collective bargaining cycle begins. For these 
contracts, an employee group is in compliance if the agreement provides for 
pay increases that do not exceed 7 percent per year over the life of the 
contract. But increases in any one year may be as large as 8 percent. Indus- 
tries where major multiyear agreements will be negotiated in 1979 include 
petroleum, trucking, rubber, electrical equipment, meatpacking, and auto- 
mobiles. In all, the wages of almost 4 million workers in bargaining units with 
1,000 or more workers, and of a similar number in smaller units, will be 
determined for the next 2 to 3 years. In the previous 1976-77 round of nego- 
tiations many of these agreements provided for double-digit annual rates of 
pay increase. A repetition of such large increases would have serious infla- 
tionary consequences not only in 1979 but in subsequent years. 

Despite the large number of exempt workers, a high rate of compliance 
by those not exempt — who account for about two-thirds of the entire wage 

104 



and salary bill — will still produce significant deceleration. Substantial com- 
pliance would limit the rate of increase of total private wages and fringe 
benefits to about 8 percent. Total employee compensation per hour, includ- 
ing employer payroll taxes, would then increase by about 8/2 percent in 
1979, a significant deceleration from the 9% percent increase in 1978. 

Because of the continued rapid escalation of food prices, increases in the 
minimum wage and social security taxes, the rise in OPEC oil prices, and 
the continued pass-through of higher prices for other imports, inflation is 
likely to remain relatively high in the first part of 1979. As the year pro- 
gresses, the rise in consumer prices should fall somewhat below a 7 per- 
cent annual rate, a rate consistent with the underlying rise in labor costs. 

A deceleration of wage and price increases during 1979 will be an impor- 
tant first step in braking the momentum of inflation. Expectations of continu- 
ing inflation would then begin to give way to the prospect of smaller increases 
in wages and prices. Further progress could be made more certain in 1980 by 
adjusting the pay and price standards. The special factors boosting inflation 
in 1978 and 1979 — food price increases, payroll taxes, medical costs, depre- 
ciation, and energy prices — may also have less effect in 1980. We can reason- 
ably expect further gains in reducing inflation. The rate of increase of con- 
sumer prices is projected to fall to just under 6/2 percent during 1980. 

Food prices over the 4 quarters of 1979 are expected to rise between 7 and 
8 percent, significantly below last year's 1 1 percent. During the first half of 
the year, however, food price increases may be larger than during the sec- 
ond half, as the food processing and marketing system reacts to increased 
costs for labor, energy, packaging, and transportation, as well as to higher 
prices for wheat, cocoa, and sugar. Prices of dairy products and the cost of 
food consumed away from home are projected to rise considerably in the 
first half of the year. 

An important reasorj for higher food prices in 1979 is likely to be a 
continued reduction in supplies of beef. Because of a decline in the num- 
ber of cattle, total beef production in 1979 is likely to be lower than in 1978. 
Production of pork and poultry is expected to rise significantly, however, 
especially in the second half of the year, and per capita consumption of all 
meats is therefore likely to decline by less than 1 percent. 

Some encouraging signs for food prices can be discerned. After increas- 
ing very sharply in the first half of 1978, the index of prices that farmers 
receive for crops remained quite stable during the second half of the 
year. This suggests that, with normal winter and spring weather, no im- 
mediate inflationary pressure should appear at the retail level because of 
abnormal increases in farm crop prices. The favorable prospects for the grain 
and soybean crops that will be harvested in the Southern Hemisphere this 
spring and the higher level of world stocks of these commodities are also 
reassuring. Hog and poultry producers are geared to expand production 
significantly, helping to offset lower beef supplies. As the Administration's 

105 



anti-inflation program begins to show tangible results, pressure on processing 
and marketing margins is also expected to moderate. 

Energy prices will rise substantially in 1979, in large part as a result of 
the 14J/2 percent increase in oil prices announced by OPEC. This OPEC in- 
crease will add almost 0.4 percent to the consumer price index by the end of 
1979 (compared to what would have happened if OPEC oil prices had re- 
mained stable) , and some further effect will be felt in 1980. Domestic energy 
prices will also increase. The deregulation of natural gas will add to the price 
of energy, and further rises in coal prices can also be expected. 

Mortgage interest costs are likely to rise less rapidly in 1979 than in 
1 978 as nominal mortgage interest rates level off and as the housing market 
weakens. In 1978 mortgage interest costs, which include the effects of rising 
prices for homes and higher mortgage interest rates, rose about 20 percent. 

Import prices have already risen significantly in conjunction with the 
decline in the dollar on foreign exchange markets during 1978. To the ex- 
tent that foreign exporters do not absorb the effects of this depreciation, 
some further price rises are likely in 1979. 

Hospital costs, which for several years have increased at nearly twice the 
rate of overall consumer prices, moderated somewhat in 1978. Further 
moderation is expected in 1979 and 1980 in response to official action at 
two levels: hospital cost containment legislation to be proposed by the 
Administration, and State cost containment programs. 

ECONOMIC OBJECTIVES AND POLICY FOR THE LONGER RUN 

During the past 2 years this Administration has developed its economic 
policies within the context of longer-term objectives for the economy. 
That approach was embedded in law during 1978 by the planning proce- 
dures incorporated in the newly enacted Humphrey-Hawkins Full Employ- 
ment and Balanced Growth Act. This act establishes procedures for devel- 
oping and reviewing economic policies within the government, requires the 
government to set 5-year goals for the American economy, and challenges 
it to formulate policies to achieve them. 

For the past three decades the Employment Act of 1946 has been the 
basic guide for the President and the Congress in the development of eco- 
nomic policies. The Employment Act charged the government with respon- 
sibility to promote maximum employment, production, and purchasing 
power through the use of the policy tools at its disposal. Since 1946 the instru- 
ments of fiscal and monetary policies have been used in ways that contributed 
to economic prosperity. In recent years, however, the view has become wide- 
spread that amendments to the Employment Act would be an appropriate 
response to the changed economic circumstances and the serious new dif- 
ficulties that we face in today's economy. The Full Employment and Bal- 
anced Growth Act of 1978 was designed to address these difficulties. 

106 



THE HUMPHREY-HAWKINS ACT 

The new law strengthens the Employment Act in three essential respects. 
It explicitly identifies national economic priorities and objectives; it 
directs the President to establish, and the Congress to consider, goals based 
on those priorities and objectives; and it creates new procedures and re- 
quirements for the President, the Congress, and the Federal Reserve to im- 
prove the coordination and development of economic policies. 

The priorities and objectives set forth in the new act are varied, reflecting 
the nature of today's economy. The act establishes as a national goal 
"the fulfillment of the right to full opportunities for useful paid em- 
ployment at fair rates of compensation of all individuals able, willing, and 
seeking to work." The new act also specifies "reasonable price stability" as 
a national objective and recognizes the need to improve government policies 
for dealing with inflation. Emphasis is placed on encouraging private and 
public capital formation to promote full employment, growth in productiv- 
ity, and price stability. The act responds to the widespread desire for re- 
duced governmental intervention by calling for steady reductions in the 
share of the Nation's output accounted for by governmental spending and by 
relying primarily on the private sector to meet the act's objectives. It also 
specifies that a balanced Federal budget, consistent with the achievement 
of other goals, is to be an objective of national policy. Finally, the act 
stresses the position of our economy in international markets. Those who 
make public policy are called on to work to improve the trade balance of the 
United States as well as its competitive position in world trade, while 
promoting fair and free international trade and a sound and stable interna- 
tional monetary system. 

To provide a better focus for the government in its effort to achieve these 
general objectives, the Full Employment and Balanced Growth Act requires 
that the Administration set annual numerical goals for key indicators in the 
economy over a 5-year period, including employment and unemployment, 
production, real income, productivity, and prices. Goals for the first 2 years 
of the 5-year period are considered short-term objectives, and the President 
is required in his budget to recommend levels of outlays and receipts con- 
sistent with them. Goals for the final 3 years are known as medium-term 
goals, and projections of outlays and receipts consistent with them are to 
be included in the President's budget. 

The act establishes new procedures for developing economic policies within 
the Federal Government. Each year the President is to present a program 
for achieving the economic goals he has set. As a matter of general guidance, 
the act provides that the government should rely as far as possible on growth 
in the private sector to meet goals for employment and output. At the same 
time, it calls the President's attention to a variety of governmental measures 
for dealing with unemployment, inflation, inadequate capital formation, and 
other problems. No new programs are specifically required or author- 

107 



ized in the act, however, and the President would need additional legislation 
to put new programs into effect. 

To improve the coordination of fiscal and monetary policies, the act re- 
quires the Federal Reserve Board to report to the Congress twice each year 
on its objectives and plans with respect to monetary policies. The Board, in 
its reports, is required to comment on the relation between its plans for mone- 
tary policy and the short-term economic goals established by the President. 

The policies of the President and the Federal Reserve Board will be con- 
sidered jointly by the Congress. The act directs the Joint Economic Com- 
mittee of the Congress to review reports from the President and the Federal 
Reserve Board, together with submissions from the committees of the Con- 
gress, and to offer its findings regarding the economic situation to the Budget 
Committee in each House prior to development of the First Concurrent 
Resolution on the Budget. Four hours during the debate on that resolution in 
each House will be reserved for debate on economic policies and goals and 
specific budgetary plans for achieving economic objectives. Through this 
process of reports and debate, the new act aims to improve economic de- 
cisions by providing better ways of arriving at them and better information 
on which to base them. 

The Full Employment and Balanced Growth Act stipulates that in the first 
Economic Report published under the act the goal for unemployment in 
1983 should be 4 percent for workers aged 16 and over and 3 percent for 
workers aged 20 and over. The act also requires that the goal for the rate of 
increase in the consumer price index in 1983 should be 3 percent. 

Beginning with the 1980 Economic Report of the President, the President 
is authorized under the new act to change the timetable for achieving the 
goals if he determines that such a change is necessary. If the President 
changes the 4 percent and 3 percent unemployment goals, however, his 
Economic Report must state the year that he expects the unemployment 
goals to be reached. 

GOALS FOR THE ECONOMY TO 1983 

Lower unemployment and inflation rates are basic objectives, but they are 
not, of course, the only economic aims of the Administration or the new 
act. As noted earlier, the Humphrey-Hawkins Act places a high priority on 
improving the competitive position of the U.S. economy in the world, 
encouraging the growth of investment and capital formation, reducing the 
share of Federal spending in the Nation's output, and balancing the budget. 
In formulating economic policies for the next 5 years, these additional con- 
cerns have been taken into consideration. 

Economic goals consistent with those specified in the act are shown in 
Table 22. The short-term goals for 1970 and 1980 represent a forecast of 
how the economy will respond over the next 2 years not only to the budgetary 
policies proposed by the President for fiscal 1979 and 1980 but to the anti- 
inflation program announced on October 24. The medium-term goals for 

108 



1981 to 1983 are not forecasts. They are projections of the economic perform- 
ance that would be required to reach the 1983 unemployment and inflation 
goals specified in the act. 

Table 22. — Economic goals, 1979-83 



Item 



1979 



1980 



1981 



1982 



1983 



Level, fourth quarter • 



Employment (millions). . . 
Unemployment (percent). 



97.5 
6.2 



99.5 
6.2 



102.6 
5.4 



105.5 
4.6 



108.3 
4.0 



Percent change, fourth quarter to fourth quarter 



Consumer prices 

RealGNP 

Real disposable income. 
Productivity ' 



7.5 

2.2 

2.8 

4 



6.4 


5.2 


4.1 


3.2 


4.6 


4.6 


2.3 


4.4 


4.4 


1.1 


1.8 


2.0 



3.0 
4.2 
4.0 
2.0 



1 Based on total real GNP per hour worked. 
- Seasonally adjusted. 

Source: Council of Economic Advisers. 

The rate of GNP growth for the 1981-83 period that will be needed if 
unemployment is to be reduced to 4 percent by 1983 will depend on the 
growth rates of the labor force and productivity. Trends in these variables 
are hard to predict, as experience in the past 2 years indicates. 

Over the next 5 years, growth in the population aged 16 and over will 
decline significantly, from about 1.6 percent in 1978 to about 1.0 percent in 
1983. The rate of increase in the labor force participation rate (the ratio of 
persons in the civilian labor force to the total number within the working- 
age range) also seems likely to slow. During recent years the participation 
rate has increased by at least 0.8 percentage point annually, well above the 
long-term trend. With slowing growth both in the working-age population 
and in the participation rate, increases in the labor force will taper off from 
current rates of 2 to 3 percent a year to perhaps 1^4 to 2 percent 5 years 
from now. 

This slowing of labor force expansion will reduce the GXP increase that 
will be needed to achieve any given reduction in the unemployment rate. At 
the same time, however, it is reasonable to expect productivity growth to 
improve somewhat over that of 1978. The slowing of labor force expansion 
will be accompanied by a shift in the age distribution of the labor force to- 
ward more mature workers, and the average experience of the labor force 
will also be lengthened by a reduction in the number of new entrants. These 
developments will help to stimulate greater productivity growth. Strong 
growth of investment could also improve the outlook for productivity. 

These considerations suggest that potential GNP over the next 5 year? 
might continue to increase at about the 3 percent rate of the past 5-year 



109 



period. There may be some slowdown in the growth of potential output dur- 
ing the next 5-year period as increases in the working-age population taper 
off, but information on labor force and productivity trends is not sufficient 
to permit a forecast of when it will happen. 

In developing the projections in Table 22 for 1981 to 1983, a potential 
GNP growth of 3 percent was therefore assumed. The trend rate of in- 
crease in productivity underlying this estimate is 1 5/2 percent, while the trend 
rate of increase in the labor force is 2 percent; these two numbers add 
to more than the 3 percent increase in potential GNP since average hours 
worked are expected to keep declining, as they have done through most of 
the postwar period. The yearly increases in the labor force and productivity 
shown in the table vary from the long-term trend because they will be influ- 
enced by the actual growth rate of real GNP in that year. 

Jobs and training programs to reduce structural unemployment might 
make it possible to achieve the goal of a 4 percent overall unemployment rate, 
and 3 percent for adults, with a somewhat lower rate of growth of real output. 
Although such programs are primarily aimed at reducing the unemployment 
rate that is consistent with stable prices, they may, at least in the short run, 
tend to increase the level of employment and reduce the unemployment rate 
that is consistent with any given level of real output. 

The increase in real disposable income from 1981 to 1983 is derived from 
historical relationships between that variable and real GNP, assuming no 
major changes in income shares between personal income and corporate 
profits. 

REQUIREMENTS TO ACHIEVE THE ECONOMIC GOALS 

By any criterion these are very ambitious goals. Achieving all of them 
simultaneously would demand not only a performance by the American 
economy that is unprecedented in peacetime history, but also government 
programs that can deal effectively with some of our most intransigent prob- 
lems, particularly inflation and structural unemployment. The fact that the 
aims are ambitious makes it all the more important to consider carefully and 
realistically the obstacles to achieving them. 

The difficulties likely to be encountered in moving the economy along the 
path set out in Table 22 follow two broad lines. First, will aggregate demand 
for goods and services be great enough to propel the economy along a 
relatively fast growth track from 1981 to 1983? What kind of budgetary 
policies would be required over the next several years to achieve this kind 
of economic growth? Second, if real economic growth did proceed at the 
pace needed to reduce the unemployment rate to 4 percent by 1983, what are 
the prospects that the inflation rate would decline to 3 percent by that year, 
and what are the principal obstacles to such a decline? 

Answers to these two groups of questions are related. The likelihood of 
achieving rapid and sustained economic growth while inflation remains 
high is very small. Inflation gives rise to forces that raise interest rates and 

110 



discourage investment. It also increases the uncertainties facing businesses 
and consumers, and at times in .he past it has severely weakened their pro- 
pensity to spend. Because inflation reduces confidence abroad as well as at 
home, it can undermine the value of the dollar, giving rise to further 
inflationary pressures. The new act recognizes that inflation and growth are 
not separable concerns, and that public policy must seek ways both to achieve 
low unemployment and to control inflation. 

Adequacy of Aggregate Demand 

The growth rates of real GNP that will be needed in 1981-83 to reach 
the goal of a 4 percent unemployment rate by the end of that period are 
quite high by past standards, but they are not unprecedented. The average 
rate of growth for those 3 years, 4/2 percent, is actually somewhat lower 
than the average rate of economic expansion from the last quarter of 1975 
to the last quarter of 1978, which was 4.8 percent. In evaluating the diffi- 
culties in maintaining a 4/2 percent average yearly growth rate of real GNP, 
however, one should recall that the current expansion will soon be entering 
its fifth year. 

The course of economic policies that would ensure sufficient aggregate 
demand growth to permit the economy to grow at a 4 /a percent rate from 
1981 through 1983 — and still avoid excess demand that would interfere 
with the unwinding of inflation — can only be described in very general 
terms. Our ability to foresee economic developments and to design appro- 
priate policies to deal with emerging: problems over a 5-year period is 
extremely limited. The outlook for 1979 is uncertain, the prospects for 1980 
are much more so, and the probable course of later developments can be 
foreseen only dimly. The best we can do is to rely on past experience to indi- 
cate possible future patterns of economic activity and tell us the kinds of 
economic policies most likely to contribute to a strong economy over the next 
5 years. 

One way to evaluate the prospects for maintaining strong economic 
growth is to consider the distribution of saving and investment by sector. 
Defined in terms of the national income and product accounts, a sector is a 
net saver if its income receipts exceed its expenditures. If expenditures exceed 
receipts, the sector has engaged in dissaving, that is, in net investment. For 
the economy as a whole, expenditures and receipts are two sides of the same 
coin, and hence measured saving and investment must always be equal. 
What one sector saves, another must invest. 

This equality of saving and investment in the aggregate is. of course, an 
accounting identity. There is no reason why decisions to save and invest 
should lead to a balance in each of the various sectors of the economy, and 
generally they will not. But when desired amounts of saving and investment 
do not match, adjustments occur in the economic system — such as changes 
in interest rates, levels of economic activity, or prices — that force saving and 
investment into balance. 

Ill 



The relation between saving and investment and the level of economic 
activity can be seen by comparing the distribution of net saving by sector 
in 2 recent years, 1973 and 1975 (Table 23). In 1973, a year of relatively 
full employment, investment incentives in the private sector were strong. 
Gross private investment — including residential construction and business 
outlays for plant, equipment, and additions to inventories — was large 
enough that it more than offset gross private saving. The governmental 
sector was close to balance: a small deficit in the Federal sector (as meas- 
ured in the national income and product accounts) was offset by a surplus 
in State and local governmental budgets. In 1975, a year of recession, in- 
vestment propensities were comparatively weak. Gross private investment 
was far below the volume of private saving, even though the latter was not 
much larger in relation to GNP than it had been in 1973. The counter- 
balancing item was a deep governmental deficit mainly due to the fact that 
Federal receipts were depressed below the levels that would have occurred 
in a more fully employed economy. 

Table 23. — Net saving by sector, 1973 and 1975 
[Net saving, or investment (— )] 





1973 


1975 


Sector 


Billions of 
dollars 


Percent 
of GNP 


Billions of 
dollars 


Percent 
of GNP 


Private sector : 

Personal ... _ 


70.3 
-77.2 

-6.7 
13.0 

.6 


5.4 
-5.9 

-.5 

1.0 

(') 


83.6 
-7.4 

-70.6 
6.2 

-11.9 




5.5 


Business 1 . .. 


-.5 


Government sector: 

Federal 


-4.6 


State and local... .. .. 


.4 


Foreign sector 3 


-.8 







1 Gross business saving plus the statistical discrepancy minus gross private domestic investment. 

2 Net capital grants received by the United States less net foreign investment. 

3 Less than 0.05 percent. 

Source: Department of Commerce, Bureau of Economic Analysis. 

Maintaining relatively strong growth from 1981 through 1983 will require 
that the excess of private investment over private saving be large enough to 
offset the net saving by both the governmental sector and the foreign sector 
in a high-employment economy. Large governmental surpluses would tend 
to make that task more difficult, as would large net saving by the foreign 
sector. 

Prospects for State and Local Budgets 

During recent years the aggregate surplus in the State and local sector, 
as measured in the national income and product accounts, has been fairly 
large, as much as 1.6 percent of GNP in 1977. The magnitude of this sur- 
plus is mainly the result of net payments into social insurance funds for 



112 



State and local employees. But in 1976 and 1977 the aggregate operating 
and capital budget of State and local governments was also in surplus be- 
cause of slow growth of capital expenditures and substantial increases in 
Federal grant programs. During 1978 the operating and capital accounts 
have returned to approximate balance; given the strong demands by citi- 
zens to reduce State and local taxes, a return to surpluses seems unlikely over 
the next 5 years. The amount of net saving in the State and local sector 
between now and 1983 is therefore likely to depend mainly on the accumu- 
lation rate of the social insurance funds. 

That accumulation rate has been moving up rapidly in the past decade, 
from about one-half of 1 percent of GNP in the middle 1960s to about 1 
percent at present. This buildup derived from the relatively rapid increase 
of State and local employment during the period and the effort by State and 
local governments to fund their pension liabilities. The upward trend in 
the ratio to GNP is not likely to continue. Growth of employment in State 
and local governments no longer exceeds the national average, and a good 
deal of funding of existing pension liabilities has already been accomplished. 
Projections by several prominent private forecasting services put the ac- 
cumulation rate of State and local social insurance funds in 1982 and 1983 
at around three-fourths of 1 percent of GNP. 

Net Foreign Saving 

The measure of net saving by the foreign sector in the national income 
and product accounts is conceptually similar to the current account deficit in 
the balance of payments. (The principal difference between them is that 
the unrepatriated earnings of U.S. firms abroad are counted as an export of 
services in the current account balance, but not included as part of net sav- 
ing by the foreign sector. ) A projection of net foreign saving or of the current 
account balance in 1983 or any single year would be extremely hazardous. 
In the past 2 years, net foreign saving has been about 1 percent of GNP; 
in 1975, on the other hand, the foreign sector showed net dissaving — that 
is, net investment — by an amount equal to 0.8 percent of GNP. Relative 
growth rates in economic activity here and abroad, differences in the rate of 
wage and price increases, changes in exchange rates, and other factors can 
cause large movements from one year to the next in our current account bal- 
ance and hence in net foreign saving. 

Looking at trends over a 5-year period, it would be reasonable to expect 
market forces to bring receipts and payments on current account close to 
balance, and the net amount of foreign saving close to zero. A tendency in 
that direction is already under way. This year the current account deficit is 
forecast to decline significantly, and a further reduction in 1980 is expected. 
By 1982 and 1983, therefore, a reasonable forecast of net saving by the for- 
eign sector would be zero. 

113 



The Federal Budget 

Prospect?, for the Federal budget, of course, depend importantly on the 
fiscal policies pursued in the years from 1981 to 1983. If there were 
no further changes in tax laws or Federal expenditure programs other than 
those recommended in the fiscal 1980 budget, and if the economy grew as 
described in Table 22, Federal receipts would rise much faster than outlays. 
With such a "current policy" budget (Table 24), Federal outlays would de- 
cline as a share of GNP to under 20 percent by 1983; but Federal receipts 
would rise as a proportion of GNP, reaching nearly 22 percent by 1983. This 
rise in receipts results from inflation and real growth, which push in- 
dividuals into higher tax brackets, and from the impact of large increases in 
social security taxes scheduled under current law, particularly in calendar 
years 1981 and 1983. The unified budget would therefore move from a defi- 
cit of $29 billion in fiscal 1980 to a surplus of $73 billion by fiscal 1983. 

T^iBLE 24. — Federal unified budget receipts and outlays under current policy budget, 

fiscal years 1979-83 

[Fiscal years] 



Item 



Billions of dollars: 



Receipts 

Outlays 

Surplus or deficit (— ). 

Percent of GNP: 

Receipts 

Outlays 

Surplus or deficit (— ). 



1979 


1980 


1981 


1982 


456.0 
493.4 
-37.4 

19.9 
21.6 
-1.6 


502.6 
531.6 
-29.0 

20.1 
21.2 
-1.2 


576. 8 
578.0 
-1.2 

20.9 

21.0 

(') 


652.6 
614.9 
37.8 

21.6 

20.3 

1.2 



1983 



718.3 

645.6 

72.7 



21.9 
19.7 
2.2 



' Less than 0. 05 percent. 

Sources : Department of the T reasury and Office of Management and Budget. 



A 1983 Federal surplus of that size, combined with a State and local sur- 
plus of three-fourths of 1 percent of GNP, would imply an overall govern- 
ment surplus equal to 3 percent of GNP, which is much larger than we have 
usually seen during periods of high employment. Maintaining a strong growth 
of economic activity under such circumstances would require a substantially 
larger excess of private investment over private saving than has been typical 
of past periods of high employment. 

Table 25 shows the balance between investment and saving in the private 
sector for selected periods of relatively high employment: 1952-53, 1955—56. 
1965-66, 1972-73, and the past 2 years. The forecast for 1979-80 is also pre- 
sented. The difference between private saving and investment in periods of 
high employment has varied considerably, but the excess of private saving 
over investment has not been more than 1 "4 percent of GNP. A large surplus 
in the governmental sector would of course provide ample funds for financing 
investment outlays, and thus tend to encourage a high rate of private invest- 



114 



ment. But past experience suggests that an excess of private investment over 
private saving equal to 3 percent of GNP would not be realized even under 
the best circumstances. 

Table 25. — Private net saving and investment and the unemployment rate, 1952-80 



Period 



1952-53 average. 
1955-56 average. 
1965-66 aveiage. 
1972-73 average. 



1977. _ 
1978'. 



1979-80 average 2 ... 



Persona 


saving 


Business net 
investment 


Excess of business 
investment over 
personal saving 


Billions 

of 
dollars 


Percent 

of 

GNP 


Billions 

of 
dollars 


Percent 

of 

GNP 


Billions 

of 
dollars 


Percent 

of 

GNP 


16.5 


4.6 


12.2 


3.4 


-4.3 


-1.2 


17.3 


4.2 


20.7 


5.1 


3.5 


.8 


31.6 


4.4 


28.3 


3.9 


-3.3 


-.5 


59.8 


4.8 


66.4 


5.4 


6.6 


.5 


66.9 
76.7 


3.5 
3.6 


69.2 
99.9 


3.7 
4.7 


2.3 
23.2 


.1 
1.1 


87 


3.6 


109 


4.4 


22 


.9 



Unem- 
ployment 

rate 
(percent) 



3.0 

4.2 

4.2 

5.2 

7.0 
6.0 

6.1 



' Preliminary. 
* Forecast. 

Sources: Department of Commerce (Bureau of Economic Analysis), Department of Labor (Bureau of Labor Statistics), 
and Council of Economic Advisers. 

Viewing the issue from a somewhat different vantage point, the rise in 
Federal tax receipts from 20 percent of GNP in fiscal 1980 to nearly 22 per- 
cent 3 years later would represent a record peacetime increase in the burden 
of taxation on the private economy. Maintaining strong growth in private 
consumption and investment in the face of such an increased fiscal drag would 
be virtually impossible. Adjustments of fiscal policy from the current Admin- 
istration policy budget would be needed to keep the economy moving for- 
ward steadily and strongly. 

In principle, a lessening of restraint through fiscal policy adjustments 
could be accomplished either by increasing Federal outlays above the cur- 
rent policy base or by cutting tax rates. Relying mainly on reductions in 
taxes to promote growth in the private sector would be consistent with 
the objectives of the Humphrey-Hawkins Act and with the goals of this 
Administration. It would also prevent tax burdens from reaching an unpre- 
cedented level. 

The appropriate magnitude and timing of such adjustments cannot, how- 
ever, be determined now. The fiscal policy needed to maintain a smoothly 
functioning economy from 1981 through 1983 will depend on spending 
propensities of consumers and businesses, the amount of stimulus or drag 
on the economy from the foreign sector as well as from State and local 
government budgets in those years, developments affecting wages and prices, 
the course of monetary policy, and so on. The stronger the autonomous 
growth in the non-Federal sectors of the economy, the smaller the fiscal 
policy adjustments needed to keep the economy growing along the path 



115 



described in Table 22, and the more rapid the progress toward a balanced 
budget. Achieving a balanced budget is consistent with the principles of 
the new legislation. But the speed with which that objective can be realized 
will depend on developments that cannot now be foreseen. 

Achieving a balanced Federal budget and at the same time maintaining a 
high growth rate of real GNP do not appear to be inherently conflicting aims. 
If the Federal budget were in balance in 1983, the excess of private invest- 
ment over saving in 1983 would have to be roughly 1 percent of GNP, 
about equal to the probable magnitude of the State and local surplus. 
Such a relationship is within the boundaries of historical precedent. It oc- 
curred in 1955-56 and again last year. And the forecast for 1979 and 
1980 implies a continuation of private investment at a rate that would 
exceed private saving by only a little less than 1 percent. 

Factors Affecting Investment and Saving 

Demographic factors are likely to favor relatively strong investment 
growth over the next 5 years. As noted earlier in this chapter, the postwar 
baby boom will give rise to very large increases during the next 5 years in the 
prime home-buying age group (25-34 years). The demand for housing is 
therefore likely to be robust in the years immediately ahead. 

Demographic factors will also work somewhat to keep the personal sav- 
ing rate low compared to the early 1970s. The 1972-73 Consumer Expendi- 
ture Survey data (Table 26) indicate that personal saving rates are about 
the same between the ages of 25 and 54, but persons in the 55-64 age group 
save a considerably higher proportion of their income than others. The 
number of people in this age group will be rising at a much slower rate than 
the 1 .5 percent average increase for the group aged 20 and over. Moreover, 
the group aged 65 and over will be growing somewhat more rapidly than 
the average, and the typical saving rate for this group is comparatively low. 
It is true that the population under 25 will be declining during the next 5 
years, and households with heads under 25 tend to be dissavers. But the 
proportion of total income and saving accounted for by this group is not 
large. 



Table 26. — Saving rate and population growth, by age of household head 

[Percent] 



Age of household head (years) 


Saving 

rate.i 

1972-73 


Distribution 

of disposable 

personal 

income, 

1972-73 


Projected 
annual 

population 
growth rate, 
1980 to 1985 


Under 25 


-6.9 
9.4 
9.7 
9.2 
11.2 
6.1 


5.3 
20.4 
21.0 
24.5 
17.0 
11.8 


-0.3 


25-34 


1.8 


35-44 


4.1 


45-54 


-.2 


55-64 


.5 


65 and over 


1.8 







i Saving as percent of disposable personal income. 

Sources: Department of Commerce (Bureau of the Census) and Department of Labor (Bureau of Labor Statistics). 

116 



A substantial increase in business investment in the period ahead would be 
required to improve productivity. Growth in the ratio of capital to labor in- 
puts has been declining since the late 1960s; in recent years, in fact, the 
ratio of capital to labor inputs has not increased at all : the labor force has 
expanded rapidly while growth in the capital stock has slowed. This decline 
in capital intensity has been one cause of the lower rate of productivity growth 
typical of this period. Over the next 5 years, business fixed investment will 
have to increase rapidly if the aggregate capital-to-labor ratio is not to fall 
even further. 

High investment requirements do not, of course, translate directly into 
incentives for businesses to press forward with investment programs to ensure 
satisfactory growth in the stock of capital. Making certain that the incentives 
to invest in plant and equipment will encourage the needed rate of capital 
expansion must be a fundamental aim of economic policy. Policies 
toward this end are discussed more fully later in this chapter. 

Perhaps the most important single contribution to this objective would 
be lower inflation. Expectations that the inflation rate will decline steadily 
over the next 5 years would directly attack one of the obstacles to the re- 
covery in business investment, since the uncertainty faced by business has 
been an important deterrent to investment planning. Indirectly, reduced 
inflation would have even larger effects on financial markets. With declining 
inflation, we could look forward confidently to a marked fall in short- and 
long-term interest rates, to strongly rising stock prices, and hence to a reduc- 
tion in the cost of both debt and equity capital. Thus, if inflation can be 
steadily reduced over the next 5 years, prospects would be much improved 
for achieving a healthy growth in business investment. 

ATTAINING THE GOALS FOR UNEMPLOYMENT AND INFLATION 

The most difficult problem we as a Nation will face in reaching the goals 
of the Humphrey-Hawkins legislation is to reduce unemployment to 4 per- 
cent and simultaneously lower the rate of inflation to 3 percent. Although 
our economy was operating at a level somewhat below potential in 1978, 
intensified pressures on wage rates and prices have already appeared. 

The Humphrey-Hawkins Act recognizes that we cannot reach the goals 
for unemployment and inflation simultaneously by relying solely on mone- 
tary and fiscal policies. The Administration shares this view. As Chapter 2 
indicated, the anti-inflation program announced by the President on Octo- 
ber 24 is based on the premise that braking the momentum of inflation will 
require widespread compliance by business and labor in reducing the rate of 
private price and wage increases. Success in that endeavor is critical to our 
ability to attain the unemployment goals of the Humphrey-Hawkins Act as 
well as the inflation goal. As noted earlier, continuation of inflation at a high 
rate could seriously jeopardize the prospects for maintaining a strong 
economy. 

117 



Unwinding the inflation inherited from the past will not remove the risk 
that new inflationary forces might develop in the future. Prudent fiscal and 
monetary policies will be needed to avoid an emergence of excess demand. 
Improved structural policies will also be required. It will be particularly 
important to find ways to curb the inflationary effects of substantial future 
reductions in unemployment from present levels. 

The current structure of labor markets in our economy makes it espe- 
cially hard to reach 4 percent unemployment and reduce inflation substan- 
tially at the same time. Unemployment varies widely across demographic 
groups. Measures to address the structural sources of unemployment have 
been an ingredient of government economic policies for more than a dec- 
ade, but differential unemployment ratios among groups in the labor force 
are greater today than they were 10 years ago. Unless these differentials can 
be reduced, the prospects are dim for making substantial further reductions 
in the unemployment rate without creating additional inflationary pressures. 

The uneven incidence of unemployment among groups in the labor force 
is shown in Table 27 for the fourth quarter of 1978 and the fourth quarter 
of 1972. In the earlier period the unemployment rate for adult white males 
(aged 20 and over), the most experienced group of workers in the labor 
force, was about the same as it was in late 1978. Over the past 6 years the 
unemployment rate for almost ever)' other group has risen relative to the 
rate for adult white males. This widening of unemployment rate differen- 
tials has been caused in part by the fact that other groups, which have rela- 
tively high unemployment rates, are growing faster as a share of the labor 
force than adult white males. 

Table 27. — Selected unemployment rates, fourth quarter 1972 and fourth 

quarter 1978 
(Percent; seasonally adjusted] 



Group 



All civilian workers 

White 20 years and over. 



Males... 
Females. 



Black and other 20 years and over. 



Males... 
Females. 



Teenagers (16-19 years). 



White 

Black and other. 



Males 20 years and over 

Females 20 years and over 

Veterans 20-34 years 

Both sexes 55 years and over. 



1972 IV 



1978 IV 



5.3 


5.8 


3.9 


4.1 


3.4 
4.7 


3.5 

5.0 


7.3 


9.2 


6.0 
8.9 


8.3 
10.2 


15.7 


16.3 


13.3 
35.4 


14.0 
35.3 


3.7 
5.2 
6.1 
3.1 


4.0 
5.8 
5.0 
2.9 



Source: Department of Labor, Bureau of Labor Statistics. 



In well-functioning labor markets some differences among the unem- 
ployment rates of various demographic groups can always be expected. 



118 



Teenagers and young adults tend to change jobs more frequently than 
older workers as they try new occupations and search for long-term careers. 
Short spells of unemployment when they first enter the labor market or 
while they look for better jobs keep their overall unemployment rate above 
the average for older workers. Women, particularly during child-bearing 
years, tend to move into and out of the labor market more frequently than 
men. 

The proportion of women and teenagers in the labor force has grown 
substantially since the earlier postwar years, and both of these groups have 
higher unemployment rates than average. In 1956 the overall unemployment 
rate was 4.1 percent. If the unemployment rates of each of the various age 
and sex groups in the labor force today were the same as in 1956, the overall 
rate would be 4.6 percent. Changes in the demographic composition of the 
labor force since 1956 have thus added about one-half of 1 percentage point 
to the unemployment rate. Between now and 1983 the structure of the labor 
force is likely to change somewhat, bringing a lower proportion of teenagers 
and a higher proportion of women. However, the effect of this change on the 
overall unemployment rate will not be large. If unemployment rates of each 
major demographic group in 1983 were the same as in 1956, the overall rate 
in 1983 would still be 4.6 percent. Achieving an overall unemployment rate 
of 4 percent at any time within the next 5 years would therefore require that 
the jobless rates of many groups within the labor force be brought well below 
the levels associated with full employment in earlier years. 

Although part of the difference in unemployment rates can be explained 
by differences in voluntary job turnover and entry and reentry into the 
labor market, major structural obstacles also confront many groups of 
workers — especially, but not exclusively, minorities. Many potential im- 
balances in labor markets disappear as workers move from sectors offering 
relatively poor prospects for employment and earnings to sectors offering 
better opportunities. But in many instances this process may be blocked by 
the difficulty of acquiring skills, wage rigidities that discourage employers 
from hiring less productive workers, and various sorts of discrimination. As 
pointed out in Chapter 2, the structural rigidities and uneven incidence of 
unemployment make it very hard under current circumstances to reduce the 
overall rate of unemployment substantially below the present level without 
encountering labor shortages in some markets. As the overall unemployment 
rate declines, demand for skilled, prime-age workers exceeds supply of those 
workers and puts upward pressure on their wages, even though unemploy- 
ment among minorities, teenagers, and women may remain unacceptably 
high. The inflationary pressures in the tight labor markets carry over into 
the rest of the economy, contributing to general inflation. 

Chapter 2 also noted that improvements in various income maintenance 
programs may have increased the time during which individuals search for 

119 



better jobs, thus raising the unemployment rate associated with excess 
demand in labor markets. The primary focus of labor market policies in the 
United States has been on manpower training programs, public service em- 
ployment, and the provision of labor market information. This Administra- 
tion has maintained a strong emphasis on these traditional programs, but it 
has also provided resources for new programs aimed specifically at creating 
work and training opportunities for youths and the poor. 

Achievement of substantially lower rates of overall unemployment in a 
noninflationary environment will hinge on whether governmental policies 
can effectively reduce the structural sources of unemployment. Toward that 
end the Administration is pursuing several strategies. 

First, strong efforts are being made to target public service employment 
programs and to reduce the degree of substitution. In the past, the net em- 
ployment gains attributable to public service employment programs have 
been considerably smaller than the number of available jobs because some 
government units used funds from that source to pay for work that would 
have been done in any case. Amendments to the Comprehensive Employ- 
ment and Training Act (CETA) in late 1976 were designed to direct public 
service jobs more effectively toward the unemployed. As the number of these 
jobs was expanded in 1977 and early 1978, the Department of Labor took 
steps to create as many net new jobs as possible with available funds, and to 
eliminate fraud in the program. In 1978 a new structural employment com- 
ponent was added under Title II of the act, establishing a category of public 
service jobs specially targeted for the disadvantaged and the long-term un- 
employed. Under the new Title II program, State and local governments 
are prohibited from supplementing the wages of public service employees. 

During 1977 and 1978 the Administration emphasized the use of public 
service jobs to promote recovery. With the economy now closer to high em- 
ployment, the Federal budget for 1980 provides funds to support 467,000 
public service jobs under CETA at the end of fiscal 1980. An increased share 
of the jobs, however, are being designated for the structurally unemployed 
under Title II. The more specific targeting and the prohibition of supple- 
mentation should improve the net job-creating impact of the program. 

Second, in 1979 the Administration will propose a major incremental 
welfare reform plan. If enacted promptly, this plan will be fully effective in 
fiscal 1982. The Administration's plan will reform cash assistance programs 
and further develop the use of CETA to combat structural unemployment. 
The plan will expand Title II of CETA and direct more of the jobs to prin- 
cipal earners in families eligible for cash assistance. The exact number of 
new Title II jobs in 1982 will depend in part on what we learn about CETA 
in the next 2 years and in part on the budgetary and economic situation in 
1982. 

Third, special employment programs that are established for youths under 
the Youth Employment and Demonstration Projects Act and other legisla- 

120 



tion wall continue to pay particular attention to the needs of the disadvan- 
taged. Total funding for these programs in fiscal 1980 will be held constant 
at the fiscal 1979 level. 

Fourth, the Administration has devoted substantial new resources in 
1979 and 1980 to promoting employment opportunities for the disadvan- 
taged in the private sector. As requested by the President, the 1978 CETA 
legislation provides authority for a special private sector employment 
and training initiative that will finance 10,000 new job training slots in pri- 
vate business. Under this program, private business will join with the Federal 
Government, State and local CETA programs, and the U.S. Employment 
Service to increase permanent private sector jobs for the disadvantaged. 
In addition, funding is being sought to create about 500,000 opportunities for 
training and work experience that will be available to the disadvantaged 
under other parts of CETA. The targeted employment tax credit, which 
was enacted in the Revenue Act of 1978, provides an income tax credit of 50 
percent of the first $6,000 of wages in the first year of employment and 25 
percent in the second to encourage the employment of disadvantaged persons, 
particularly youths between the ages of 18 and 24. Although this approach 
to structural unemployment is new to the United States, selective employ- 
ment subsidies have been tried in a number of European countries, includ- 
ing France, West Germany, Sweden, and the United Kingdom. 

In various ways these programs directed toward the problem of structural 
unemployment can reduce the labor market shortages and inflationary pres- 
sures that would otherwise be associated with achieving a low overall rate of 
unemployment. To the extent that training programs provide skills for dis- 
advantaged groups, they increase the supply of workers available to fill 
some of the skilled and semiskilled jobs that are created in a rapidly 
growing economy. Evaluations of the success of Federal training programs 
for the disadvantaged provide mixed results. But there is some evidence that 
training programs increase the employability and earning power of trainees 
by an amount that exceeds the cost of the programs. The extent to which 
these programs could be expanded significantly and still retain their effec- 
tiveness is uncertain. 

Public service employment programs can in principle help the 
unemployment-inflation tradeoff. If carefully concentrated on the struc- 
turally unemployed, they can add to total employment without substantially 
increasing upward wage pressures in the labor market. And to the extent 
that they inculcate better working habits and skills among those who would 
otherwise be chronically unemployed, they act as a training program with 
the advantages described above. But several limitations restrict the usefulness 
of public service employment in dealing with the unemployment-inflation 
tradeoff. In periods of tight labor markets — when the tradeoff problem is 
most serious- — a public cervice jobs program that pays relatively attractive 
wages may encourage workers who would otherwise be available for private 

121 



employment to take public service jobs, thereby adding to upward wage 
pressures. On the other hand, if public service jobs paid relatively low wages 
they might attract very few workers during periods of tight labor markets. 
While carefully designed public service employment programs can help pro- 
vide jobs to the disadvantaged, reduction of structural unemployment by 
enough to achieve the Humphrey-Hawkins unemployment and inflation 
goals will require the use of other programs as well. 

The more recent additions to our armory of weapons against structural 
unemployment are the special private sector employment initiative and the 
targeted tax credit. These have the advantage of directing the structurally 
unemployed to the private sector where the bulk of new jobs will be forth- 
coming. They may make an important contribution to improving the trade- 
off between unemployment and inflation, but they are too new to have been 
fully evaluated. 

Industrial Capacity and Sectoral Problems 

At the present time the utilization of industrial capacity is below, but not 
far below, the peak levels reached in 1973. At that time pressure on 
capacity, especially in raw materials industries, began to develop, adding 
to inflationary pressures. To avoid similar problems in the future, industrial 
capacity over the next 5 years would have to expand about as fast as output. 

Last year the Council of Economic Advisers investigated the relation 
between output, investment, and capacity expansion. The conclusion was 
that a fairly rapid expansion of output — 4.8 percent a year between 1977 
and 1981 — would raise the capacity utilization rate. The rate would remain, 
however, below inflationary levels if there were a substantial expansion of 
investment similar to that in 1962-66, when both capacity and output grew 
rapidly. In 1979 and 1980, the growth of output is forecast to be slower 
than in 1978. Capacity utilization over the next 2 years is therefore 
unlikely to rise, and it might fall somewhat. As a consequence, there 
appears to be little risk of widespread major capacity shortages in this period. 
But in the subsequent 3 years, achievement of the Humphrey-Hawkins goals 
for unemployment would require growth in output averaging about 4^ 
percent a year, or only slightly below the 4.8 percent growth rate analyzed 
in last year's capacity utilization study. 

In general, therefore, the conclusions reached in last year's study are 
applicable to the 1981-83 period. If real GNP grew at a 4/ 2 percent average 
rate, a rapid growth in investment would be necessary to hold the capacity 
utilization ratio to levels that did not threaten inflation. 

An earlier section of this chapter discussed the relationships between 
saving, investment, and the government budget that would be needed to 
achieve the Humphrey-Hawkins goals for output and employment and still 
move toward a balanced Federal budget. The analysis showed that a 
substantial expansion in private investment relative to private saving would 
be needed. Investment would have to grow at rates approximating those of 

122 



the 1962-66 period— a difficult but not unattainable goal. If that occurs, the 
requisite capacity expansion would be forthcoming. 

There are other ways in which aggregate demand could expand 
rapidly in the 1981-83 period. Large consumption-oriented tax cuts, for 
example, would result in a faster expansion of consumer outlays but a 
slower growth in private investment than if tax cuts were oriented more 
toward stimulating capital formation. Consumption-led growth would create 
a danger that capacity would not expand fast enough to avoid inflationary 
pressures. Such an outcome would not only defeat the Humphrey-Hawkins 
goal of reducing inflation, but also threaten the possibility of maintaining 
satisfactory economic growth and achieving a substantial reduction in the 
rate of unemployment. 

SUMMARY 

The aspects of economic performance that are critical for the achieve- 
ment of our longer-run economic objectives were discussed above. 
Growth in aggregate demand sufficient to reduce unemployment to the 
levels set forth in the act would require fiscal policy adjustments after 1980, 
which could be accomplished within the framework of balancing the budget 
and reducing Federal outlays as a share of GNP by reducing taxes. A strong 
growth in private investment would be needed. Business investment would 
have to be particularly strong, but not out of line with performance 
during other times in the postwar period. Without progress in reducing 
inflation, however, this outcome is unlikely to be realized. 

The most difficult obstacle to achieving the 1983 goals arises from the 
potential inconsistency between the objectives for growth and unemployment 
and the need to reduce inflation. Aggregate demand policies must be framed 
to take this problem into account. Economic policies for the next 2 years 
are designed to avoid any acceleration of inflation from the demand side, 
and to use macroeconomic instruments together with the pay and price stand- 
ards to unwind the inflation inherited from the past. It is clear, however, 
that the task of reducing inflation to an acceptable pace will not be com- 
pleted by 1980. We should not commit ourselves now to highly stimulative 
macroeconomic policies in the years after 1980; to do so might result in an 
acceleration of inflation, thereby threatening the maintenance of stable 
economic growth. 

Our prospects for achieving the 1983 goals depend upon finding ways to 
reduce the divergence of unemployment rates among various demographic 
groups. With the current structure of labor markets, reducing the overall 
unemployment rate to 4 percent, and the unemployment rate for adults to 
3 percent, would require that unemployment rates for experienced adult 
workers be brought down to extremely low levels. There would be a very sub- 
stantial excess demand for those workers, giving rise to inflationary wage and 
price increases. The Federal Government has a number of programs in place, 

123 



and is inaugurating several new ones, aimed at reducing structural unem- 
ployment. At the present time, however, we cannot be sure that continuing 
or even rapidly expanding these programs would make possible an overall 
4 percent unemployment rate without accelerating inflation. Much work 
needs to be done to improve existing employment programs and discover new 
approaches to structural problems if the goals of the act are to be realized. 

INVESTMENT POLICY REPORT 

The Humphrey-Hawkins Act puts considerable emphasis on the impor- 
tance of capital formation in achieving our national economic goals. One 
of its requirements is the inclusion of an Investment Policy Report in this 
Economic Report. 

Private investment during the coming years will play two important roles 
in shaping economic developments. A strong rise in business fixed invest- 
ment will be required to achieve sustained economic growth and declining 
unemployment. Substantial growth in the capital stock will also be needed 
to expand our capacity to produce. Only by devoting a significant share 
of current production to replace, modernize, and expand the capital stock 
can we hope to maintain adequate growth in productivity. 

Growth in the capital stock will be of strategic importance in particular 
sectors of the economy. If growth of productive capacity were to lag 
in sectors producing supplies that were of critical importance in other in- 
dustries, bottlenecks would develop, restricting overall growth and adding 
significantly to inflationary pressures in periods of high demand. This is 
particularly true of the basic materials and energy-producing industries 
where substitutes, exclusive of imports, may be difficult to find. 

Our competitive position in world markets will also depend heavily on 
whether or not business fixed investment grows at an adequate pace. Most 
other industrial countries devote a larger share of output to investment 
than the United States does, and their growth rates of productivity have also 
been higher than ours. Increasing the growth of productivity in the United 
States would help significantly to improve the outlook for our foreign trade 
balance and to strengthen the dollar in foreign exchange markets. 

POSTWAR TRENDS IN INVESTMENT AND CAPITAL FORMATION 

Business fixed investment has been quite volatile historically— fluctuating 
in absolute level and as a percentage of GNP in response to a number of 
factors: prospects for future output growth and profits, the degree of un- 
certainty about the future, growth rates of population and the labor force, 
relative costs of capital and labor, and the speed of innovation. As shown in 
Chart 8, business fixed investment since 1946 has ranged between 8/ 2 and 
1 1 percent of real GNP. Although there is no obvious sustained trend in this 
ratio, it tended to hover close to 9 percent in the 1950s and early 1960s, and 
then moved somewhat above 10 percent from 1965 to 1974. 

124 



Chart 8 



Real Nonresidential Fixed Investment as 
Percent of Real GNP 



PERCENT 
11.5 



11.0 



10.5 



10.0 



9.5 



90 



8.5 - 




I I I • I I I I I * l I I I Li. 



} 



1946 1950 1955 1960 1965 1970 1975 

SOURCE DEPARTMENT OF COMMERCE 

The recovery of investment from the 1974—75 recession was slow. The 
9.7 percent investment share for 1977, the third year of recovery, was only 
midway between the low of 8.7 percent registered in 1952, 1958, 1959, and 
1961 (all but 1952 being recession years) , and the high of 10.8 percent scored 
in 1966. Last year investment regained a 10 percent share of GNP. 

If a rough estimate of the investment contributed by the public sector is 
added to private investment, the investment share of GNP is increased. Al- 
though differences in statistical measurement and in industry structure 
make international comparisons imprecise, the evidence (Table 28) 
suggests that the share of investment in gross domestic product is lower in the 
United States than in other industrial countries. In the years following 
World War II such differences were explainable by the need in Japan 
and in European countries to replace productive capital destroyed in the war. 
More than 30 years after the war, this explanation can no longer be valid. 

International comparisons are not the only, or even the most important, 
indicator of the adequacy of investment. Achieving the objectives of the 
Humphrey-Hawkins Act over the next 5 years would require strong invest- 
ment to support the expansion of private demand, to equip an increasing 
number of workers, to improve productivity growth, and to meet environ- 
mental and social goals. The precise amount of capital required to equip a 

125 



Table 28. — Real nonresidential fixed investment as percent of real gross domestic 

product, 1966-76 



Country 



Percent of GDP 



United States... 

Canada 

France 1 

West Germany. . 

Japan 

United Kingdom. 



13.5 
17.2 
16.7 
17.4 
26.4 
14.9 



i 1970-75. 

Note. — Data are on an OECD basis. 

Source: Organization for Economic Cooperation and Development. 

worker is, of course, variable. Alternative technologies exist or can be devised 
to produce the same output with differing ratios of capital to labor, and shifts 
between industries can also change the overall ratio, since capital-labor 
ratios differ across industries. Because growth in the civilian labor force 
over the past decade has been more rapid than in the preceding 10 years 
(28 percent compared to 16 percent), an acceleration in investment would 
have been needed to maintain the rise in the capital-labor ratio achieved 
earlier. More rapid growth of employment in less capital-intensive sectors 
(government, trade, finance, insurance and real estate, and some services) 
than in manufacturing, utilities, communication, and transportation, how- 
ever, has perhaps reduced the need for this acceleration. 

The capital-labor ratio has typically shown a long secular upward trend 
in all the major industrial countries. This has coincided with improvements 
in the health and education of the work force and substantial technological 
change. The precise roles and interactions between these forces in contribut- 
ing to the secular growth in productivity remain subject to considerable 
debate and are difficult to verify quantitatively. It is worth noting, however, 
that the U.S. capital-labor ratio grew at an average annual rate of nearly 3 
percent between 1948 and 1973. Since then the growth of this ratio has 
declined more than 1 percentage point. These developments coincided with a 
decline in the trend rate of growth of productivity in the private nonfarm 
economy from 3 percent between 1948 and 1973 to under l*/ 2 percent over 
the past 5 years. Restoring the earlier trend in the ratio of capital to labor 
input would make an important contribution to greater productivity growth, 
but such an increase will require devoting a larger share of our national 
output to business investment than has been characteristic of recent years. 

A number of other considerations suggest that society would benefit from 
stronger investment than has occurred in much of the recent past. To expand 
our production of domestic energy, at least in part from new sources, will 
require large outlays at some future time. In addition, society is demanding 
protection from environmental pollution, occupational hazards, and product 

126 



deficiencies. Achieving these social goals, which are not part of output as 
conventionally measured, entails additional investment. Business expendi- 
tures for pollution abatement have risen to a significant fraction of total busi- 
ness fixed investment in recent years, an estimated 5 percent in 1977 and 4.7 
percent of total planned investment in 1978. Table 29 illustrates the sub- 
stantial variation among industries in these outlays. For some, the percent- 
age of total investment is more than twice the national average. Investments 
for pollution abatement and other social objectives may, to some degree, 
displace investment that would expand capacity. Consequently higher total 
investment will be needed if we are to meet both output goals and social 
objectives. 

Table 29. — Capital expenditures by business {or pollution abatement, by industry, 

1976-78 
[Percent of total capital outlays by business] 





Industry 


1976 


1977 




1978 plar 


ned 






Total 


Air 


Water 


Solid 
waste 


All 




5.6 
8.3 
6.6 

15.7 
5.6 
1.6 
3.4 
6.1 
3.9 

9.6 

4.5 
4.4 
14.7 
11.4 
10.9 
3.4 
1.4 

3.5 

2.2 
1.1 

1.2 
1.1 
9.1 

.5 


5.1 
7.0 
5.9 

lb. 7 
3.4 
1.8 
3.1 
7.3 
3.6 

8.0 

4.2 
3.8 
13.8 
10.2 
8.2 
3.3 
1.2 

3.5 

2.2 
1.0 
.8 
1.0 
8.8 

.5 


4.7 
6.2 
5.5 

14.4 
3.4 
1.8 
4.0 
7.3 
2.9 

6.8 

4.7 
3.5 
9.6 
9.2 
7.0 
3.0 
1.0 

3.6 

3.1 

1.4 

.9 

.9 

8.7 

.5 


2.4 
2.9 
3.0 

9.4 
1.1 
.7 
1.5 
4.9 
1.3 

2.7 

1.7 
1.0 
3.6 
3.5 
3.0 
1.9 
.6 

2.1 

1.1 
.0 
.6 
.2 

5.4 

.2 


1.9 
2.8 
2.1 

4.6 
1.9 
1.0 
1.9 
2.1 
1.4 

3.4 

2.5 
1.9 
5.3 
5.1 
3.3 

10 , 
■ 3 

1.2 

1.0 

1.3 

.2 

.6 

2.8 

.2 


0.4 




Manufacturi ng 

Durable goods 

Primary metals 

Electrical machinery 


.5 
.3 

.5 
.4 




Machinery, except electrical 

Transportation equipment 

Stone, clay, and glass 


.1 
.6 
.3 




Other durables 

Nondurable goods 

Food, including beverage 

Textiles 


.1 

.6 

.5 

.7 




Paper-. 


.7 




Chemicals 


.7 




Petroleum... 


.8 




Rubber . 


.1 






.1 






.3 






.9 




Railroad 


.0 






.0 






.1 






.5 




Communication, commercial, and 
other ' 


.1 









1 Consists of communication, trade, service, construction, finance, and insurance. 

Note. — Excludes agricultural business; real estate; medical, legal, educational and cultural services; and nonprofit 
organizations. Pollution abatement operating costs are also excluded. 

Data for 1976 are based on the survey conducted in November and December 1976. Data for 1977 and 1978 are based on 
the survey conducted in November and December 1977. 

Source: Department of Commerce, Bureau of Econcmic Analysis. 
INVESTMENT INCENTIVES 

The most important inducement for investors is the prospect of future 
profits from future sales. These profits may come from increased sales activ- 
ity, reductions in production costs, or improvements that allow a higher 
price for the product or attract more buyers of the produc t. The principal 



127 



indicators of the profitability of investment are the rate of growth of output, 
the percentage of current capacity that is utilized, and the rate of return on 
the existing capital stock. Costs of investment are also important, of course. 
These include the price of physical units of capital and the costs of financing 
investments. Financing costs depend on the after-tax real rate of return 
required in capital markets by those who provide funds for investment. Var- 
ious measures are used for this required rate of return. One is the long-term 
corporate bond rate, adjusted for inflation. The required rate of return 
could, alternatively, be captured by the earnings-price ratio in the stock mar- 
ket. The price of physical capital and the effective rate of return required 
by investors can be combined into a single measure, the ratio of the stock 
market value to the replacement cost of corporate net assets. When inves- 
tors' required rate of return rises relative to firms' current earnings, the 
market value of corporate stock declines relative to its replacement cost. 
Some of the major measures of the profitability and cost of investment are 
summarized in Table 30. 

Table 30. — -Determinants of business fixed investment, 1955-78 

[Percent] 



- 


Ratio of real 

investment to 

realGNP 


Capacity utili- 
zation rate in 
manufacturing' 


Nonfinancial corporations 


Year 


Cash flow 
as percent 
of GNP ' 


Rate of return 

on depreciable 

assets * 


Rate of return 

on stockholders' 

equity * 


Ratio of market 

value to re- 

placement cost 

of net assets » 


1955 


9.3 
9.7 
9.7 
8.7 
8.7 

9.0 
8.7 
8.9 
8.8 
9.3 

10.3 
10.8 
10.3 
10.3 
10.6 

10.2 
9.8 
10.0 
10.6 
10.7 

9.4 
9.4 
9.7 
10.1 

9.6 
9.6 


87.0 
86.1 
83.6 
75.0 
81.6 

80.1 
77.3 
81.4 
83.5 
85.7 

89.5 
91.1 
86.9 
87.0 
86.2 

79.2 

78.0 
83.1 
87.5 
84.2 

73.6 
80.2 
82.4 
84.2 

86.2 
83.8 


9.3 
8.9 
8.9 
8.6 
9.2 

8.9 
8.8 
9.4 
9.6 
10.0 

10.4 
10.3 
9.9 
9.4 
8.6 

7.9 
8.2 
8.6 
8.0 
6.9 

8.7 
9.1 
9.0 
9.9 

9.9 
9.3 


15.0 
13.2 
11.6 
9.5 
12.2 

11.1 
11.0 
12.7 
13.6 
14.8 

16.3 
16.2 
14.2 
14.2 
12.8 

10.1 
10.3 
11.5 
12.3 
11.4 

9.3 
10.4 
10.6 
10.6 

14.7 
13.0 


6.0 
5.2 
4.9 
3.8 

4.8 

5.0 
4.4 
5.8 
6.3 
7.5 

9.0 
8.8 
7.7 
7.6 
6.9 

4.4 
5.2 
6.4 
8.7 
8.4 

5.2 
4.8 
6.2 
8.9 

7.5 
6.1 


0.932 


1956.. 


.921 


1957 


.853 


1958 


.874 


1959 


1.044 


1960 


1.019 


1961. 


1.147 


1962 


1.092 


1963 


1.204 


1964 


1.295 


1965 


1.360 


1966 


1.205 


1967... 


1.217 


1968 


1.257 


1965 


1.124 


1970 


.911 


1971 


1.000 


1972 


1.076 


1973 


1.016 


1974... 


.756 


1975 


.725 


1976 


.825 


1977 


.768 


1978* 


.703 


1962-66 average 

1955-70 average 


1.231 
1.091 



1 Federal Reserve Board index. 

1 Cash flow calculated as after-tax profits plus capital consumption allowance plus inventory valuation adjustment. 
' Profits before taxes plus capital consumption adjustment plus net interest paid divided by the stock of depreciable 
assets valued at current replacement cost. 

* After-tax profits corrected for inflation effects divided by net worth (physical capital component valued at current 
replacement cost). 

» Equity plus interest-bearing debt divided by current replacement cost of net assets. 

* Preliminary. 

Sources: Department of Commerce (Bureau of Economic Analysis), Board of Governors of the Federal Reserve System, 
and Council of Economic Advisers. 



128 



A year ago the Economic Report noted that the 1974-75 recession and 
the period of price controls in 1971-73 had severely depressed investment 
incentives. As was also noted, measures of investment incentives were re- 
covering, and continued expansion and rising utilization rates held the 
promise of further improvement. 

Table 30 presents preliminary data for 1978 indicating substantial further 
gains in capacity utilization and in the rate of return on stockholders' equity. 
The latter measure, the ratio of after-tax economic profits to net worth, was 
boosted by the effect of inflation in reducing the real burden of corporate 
debt. Furthermore, the improvement in the rate of return on stockholders' 
equity relative to earlier periods partly reflects a shift in the structure of 
corporate financing of investment from equity to debt issues. 

The rate of return on all depreciable assets (profits before tax plus capital 
consumption adjustments and interest paid) maintained the level it had 
achieved in 1977 but did not increase further. The rate of corporate cash 
flow was slightly depressed because profit growth slowed somewhat ; although 
profits measured in book value terms were strong, a significant part of this 
strength was attributable to capital gains on inventories and to underestima- 
tion of depreciation, both resulting from the increase in inflation. 

The weakest of the determinants of investment in 1978 was the ratio of 
market value to replacement cost of capital, which fell in response to the 
weakness in stock prices. Equity values have risen relatively little during this 
cyclical recovery for many reasons: uncertainties engendered by the depth 
of the 1974-75 recession, the sharp disruption caused by higher energy costs, 
fluctuations in the exchange value of the dollar, and a volatile inflation rate. 

Of the four measures of profitability shown in Table 30, only one, the 
rate of return on stockholders' equity, has regained the 1955-70 average. 
The other three are well below the 1955-70 average and still further below 
the average for 1962-66, when investment outlays rose very strongly. 

In view of the possible increase in the perceived risks of investment since 
the early 1970s, one might surmise that businesses have begun to respond dif- 
ferently to the usual measures of investment incentives. During the past 
year the Council of Economic Advisers extended its earlier analysis of this 
subject. Economists have suggested several alternative formulations, or mod- 
els, of the determination of investment, which emphasize to various degrees 
the influence on investment of growth of output, variations in capacity 
utilization, changes in cash flow and in the rental price of capital, and the 
ratio between the market value of capital and its replacement cost. All in- 
volve substantial margins of error. 

The Council has not attempted to choose between these different formula- 
tions. It has tested, for each model, whether the statistical relation between 
investment and those factors that determine investment in the model differ 
significantly in the various periods covered by the examination. 

This analysis suggests that the behavior of investment in equipment has 
not changed significantly during the years since 1973 in comparison with 

129 



earlier years. Variations from year to year in the strength of investment in 
equipment, relative to the forces expected to determine it, have remained 
within the normal margin of error. Indeed, if there has been any point in 
recent years at which the pattern of investment in equipment seems to 
have changed, the most likely time would have been in 1968-69. This period 
also marked the beginning of a slowdown in the growth of the capital- 
labor ratio. 

Most formulations indicate that investment in structures was unusually 
slow following the 1974-75 recession and that the substantial recovery last 
vear was not explained by reference to previous relationships. Quite possibly, 
special factors affecting particular industries may underlie this structural 
change. For example, early in the recovery the impact of environmental 
regulations on the steel industry was very heavy at a time when capacity 
utilization and profits were exceptionally low both here and abroad, and 
foreign competition was particularly severe. Similarly, uncertainties about 
energy prices may have had a perverse effect on investment by utilities 
before the enactment of the energy bill. 

This analysis suggests tentatively that some weakening of the demand for 
equipment may have occurred at the end of the 1960s or early in the 1970s 
in response to greater perceived risks, and that a variety of special factors 
may have disrupted the normal pattern of investment in structures. More- 
over, as noted above, the profitability of investment has not yet regained the 
high level prevailing in the early 1960s. If the investment needed to reach 
our economic goals in 1983 is to be realized, policy actions are required that 
will strengthen investment incentives and reduce investment costs and risks. 

Tax policy is one instrument that can encourage investment by lowering 
the rental cost of capital, or raising its after-tax rate of return. The Revenue 
Act of 1978 contained important measures toward achieving this end. 
The corporate tax rate was reduced by lowering the top rate from 48 
percent to 46 percent and by scaling the rate up more gradually, across 
four brackets instead of two, so that the top rate is paid on earnings over 
$100,000 rather than $50,000. The act also made the investment tax credit 
permanent. The limitation on the amount of tax liability that could be off- 
set by the credit is to be raised from 50 to 90 percent by 10 percentage point 
increments from 1980 to 1982; the credit is extended to cover rehabilitation 
of nonresidential structures and single-purpose agricultural and horticul- 
tural structures; and it is liberalized for certain pollution control facilities. 
Selected tax treatment of small businesses was also liberalized. Finally, 
taxes on capital gains were reduced. The proportion of net long-term capital 
gains that can be excluded from an individual's taxable income was raised 
from 50 percent to 60 percent. The alternative tax of 25 percent was 
dropped, and the excluded portion of capital gains will no longer be counted 
as a preference item subject to the minimum tax. A new alternative mini- 
mum tax was introduced, however, with a maximum rate of 25 percent. 
These changes reduce the effective tax rate on capital gains by about 
one-third. 

130 



All of these tax changes result in a lower rate of taxation on returns to 
corporate capital — the key sector for productivity-raising investment, since 
it produces 75 percent of total private output. The corporate rate reduction 
and the investment tax credit will have the greatest effect because they are 
concentrated directly on the corporate sector and on the relatively heavily 
taxed, capital-intensive industries in that sector. The reduction in the capital 
gains tax may also be helpful in encouraging the supply of risk capital, but 
lowering capital gains taxes is not an efficient means of promoting investment. 
Only one-third of taxable capital gains accrue on corporate stock or on 
assets owned by corporations. Only two-thirds of capital gains accrue on 
reproducible long-lived assets used in production. The part of the tax advan- 
tage that accrues to other sectors (for example, capital gains on land) may 
have no investment effect. Furthermore, a significant fraction of gains 
accrue in already lightly taxed industries. As a result, this tax change con- 
flicts with the objective of equalizing taxation across industries and thus dis- 
torts the efficiency with which markets allocate resources. 

Further tax reductions designed to strengthen investment incentives may 
well be needed in the years ahead to encourage a high rate of investment in 
new plant and equipment. Given the budgetary constraints required in the 
near future to reduce inflation, there is no room for additional tax cuts 
now. Over the longer term, however, opportunities for further general tax 
reduction will emerge. As they do, reductions carefully designed to strengthen 
incentives for business investment should be given high priority-. 

Other public policies have a substantial influence on investment incentives. 
Pollution abatement requirements and other forms of social regulation per- 
taining to health and safety impose costs on private industry — both current 
operating costs (for example, by requiring extra workers for waste treatment 
processes) and capital costs (covering such items as extra equipment for 
safety and pollution control) . Industries like steel, coal, chemicals, and elec- 
tric utilities have been especially affected. 

As discussed in Chapter 2, the Administration is working to make the 
regulatory process more rational. A strong and successful effort in this 
direction offers promise of reducing significantly the costs of regulation 
relative to its social benefits. In turn, this should reduce the effective capital 
costs of investment projects and thereby strengthen investment incentives. 
Furthermore, removing some of the uncertainty regarding future regulations 
will facilitate business investment decisions. 

Other policy measures should also help to reduce the risks faced by those 
responsible for making investments. The energy legislation enacted last year 
will make the relative prices of various types of fuels more predictable. Co- 
ordination of Federal efforts to improve productivity is being undertaken by 
the National Productivity Council, a cabinet-level group. A major effort is 
also under way to promote more rapid innovation through increased em- 
phasis on research and development. 

131 



RESEARCH AND DEVELOPMENT 

Research and development expenditures are a form of investment on 
which the returns are very uncertain, especially in the case of basic research. 
In some instances society as a whole may benefit from research that adds 
nothing to an individual investor's profits: for example, when it is dis- 
covered that a theory does not work. Moreover the investor is usually unable 
to capture all of the returns from research even when the results are di- 
rectly useful. The limited life of a patent and uncertainties about patent 
rights and the enforcement of patents have deterred investment in research 
and innovation. 

The slow growth of research and development expenditures in this 
country in recent years may account for a part of the low productivity 
growth of the 1970s. After correction for inflation, expenditures for research 
and development in 1975 were only 2.6 percent above their level in 1965. 
This slow growth was largely due to the decline in space-related research; 
private expenditures for research and development grew at roughly the 
same pace as the economy. In contrast to the trend over the past decade, 
real Federal support for research and development rose by 4.2 percent in 
1977 and by 2.6 percent in 1978, while total spending for this purpose 
increased to 4.4 and 2.8 percent respectively in these 2 years. This amounts, 
to a 2-year gain almost three times as great as the rise in the previous 10 
years. 

Recognizing the importance of basic research to innovation and the high 
risks of conducting such research in the private sector, the Administration 
initiated a significant expansion of obligating authority and outlays for basic 
research and development in the fiscal 1979 budget. Outlays this year in cur- 
rent dollar terms will rise by almost 18 percent from fiscal 1978 levels, and 
they are scheduled to increase by an additional 10 percent in fiscal 1980. 

The President has also begun a comprehensive interagency review, under 
the leadership of the Secretary of Commerce, of all Federal policies bearing 
on the process of industrial innovation. This review will rely on assistance 
from relevant Federal agencies, representatives from business and labor, 
and other interested parties. Its scope is not limited to the influence the Fed- 
eral Government exerts through direct expenditures and grants for research ; 
it will also consider the effect of patent, antitrust, procurement, and other 
governmental polices that bear indirectly on research and innovation. 

THE SUPPLY OF INVESTMENT CAPITAL 

The supply of resources available for business fixed investment is limited by 
the capacity of the economy to produce goods and by the amounts of those 
goods that are preempted for other public and private uses. When sub- 
stantial slack remains in the economy, expansion of public spending or 
private consumption has little or no adverse impact on the supply of invest- 
ment goods. In fact, an expansion of public spending or consumer demand 

132 



is likely under those circumstances to increase investment by improving the 
perceived profitability of investment. 

When the economy is operating close to capacity, however, increases in 
public demand or private consumption will adversely affect business fixed 
investment, because prices of capital goods are bid up and the cost of bor- 
rowing rises. One aim of Federal policy must be to avoid excess aggregate 
demand and the inflation and credit market tightness that it generates. A 
second aim must be to analyze carefully the social costs and benefits of Fed- 
eral programs, in order to control the share of the Nation's output absorbed 
by the government. Achieving this goal in the context of favorable tax and 
monetary policies will help provide the real resources, credit market condi- 
tions, and incentives needed for rapid growth of the capital stock. 

As the Federal budget is moved toward balance in the context of con- 
tinued economic expansion, and as growth in the government share of total 
output is curbed in the years ahead, more resources will be available for busi- 
ness fixed investment. The combination of this fiscal policy with successful 
steps to reduce inflation will create the environment in which monetary 
policy can offer more encouragement to investment. 

Financial capital in recent years has been available at attractive real in- 
terest rates, although nominal rates have remained high. Nonfinancial cor- 
porations have raised substantial amounts of funds in credit markets. The 
ratio of funds raised in credit markets to total capital expenditures began to 
rise rapidly in late 1976 and reached a peak in the first quarter of last year, 
after which it tapered off. The 1978 first quarter peak was surpassed his- 
torically only in 2 isolated quarters during the 1972-73 investment boom. 

A similar pattern appears in the nonfarm, noncorporate sector. For farm 
business, on the other hand, growth of credit use was more modest than in 
other sectors during 1977, but it accelerated sharply in the second and third 
quarters of last year to a pace more than 25 percent above the 1977 average. 

These relatively high rates of business credit expansion were facilitated by 
the steady flows of funds to those financial intermediaries that are important 
for business lending, particularly life insurance companies and pension 
funds. Growth in pension fund reserves — a means by which households indi- 
rectly provide loans to businesses and governments — rose by a dramatic 46 
percent between 1975 and 1977. In the second and third quarters of last year 
the average growth in these reserves was 8.6 percent above the 1977 pace. 

The cost and availability of equity capital are more volatile than is true of 
debt capital, since they depend on the expectations of the public as reflected 
in stock prices and on the willingness of private and institutional investors to 
accept equity market risks. In periods when credit markets are weak, firms 
may thus be forced to accept a higher debt-equity ratio than they would 
prefer. This is particularly likely in periods when the flow of internal funds 
is small relative to desired investment. It probably happens also to firms in 
cyclically sensitive industries that do not have exceptionally strong growth 
trends, and to newer businesses that have not yet established strong earnings 

133 



records. In 1977 and the first half of 1978, new issues of common and pre- 
ferred stock accounted for only 23 percent of the gross proceeds of stock and 
bond issues. The lagging recovery of the stock market during the current 
expansion is undoubtedly a major reason why this ratio is lower than in the 
mid-1960s, when stock prices were high. 

SMALL BUSINESSES 

The availability of capital, and particularly equity capital, to small busi- 
nesses is a fundamental concern. The data at hand suggest persistently higher 
debt-equity ratios for small corporations (those with assets under $5 million) 
manufacturing nondurable goods than for larger ones. For small manufac- 
turers of durable goods the ratio of debt to equity has been higher than for 
large corporations in all years since 1959, except in the period from 1967 
to 1971, when borrowing by large corporations rose sharply. 

These higher debt-equity ratios and a corresponding heavier reliance 
on bank credit are partly due to the fact that small businesses tend to have 
a higher proportion of assets invested in inventories and a lower proportion 
in plant and equipment. This, in turn, may be caused by a differing distribu- 
tion of large and small firms within various industries. It may also, how- 
ever, be a symptom of imperfections in capital markets that limit the avail- 
ability of equity capital. 

Programs of the Small Business Administration (SBA) are designed to 
increase the financial capital available to small firms. In 1977 the number of 
direct loans approved by the SBA rose 25 percent, and the dollar value of 
new loans rose 70 percent. In addition to the direct loan program, the SBA 
also licenses, regulates, and provides financial assistance to small business 
investment companies (SBICs) . The privately owned SBICs pool public and 
private funds in order to provide equity and long-term debt capital to newer 
small businesses. These latter firms, in contrast to those financed by other 
SBA programs, tend to operate in new markets or with new technology. At 
the end of 1977 there were 273 SBICs, making use of $428 million of private 
capital and $537 million of funds from the SBA. The volume of new fi- 
nancing arranged during fiscal 1977 was $197 million, a 68 percent increase 
from the preceding year. In order to provide special attention lo the needs 
of businesses owned by socially or economically disadvantaged persons, the 
SBA administers a parallel program of SBICs for minority enterprises. The 
volume of loans under this program grew 72 percent in fiscal 1977. 



134 



CHAPTER 4 

The World Economy — Managing 
Interdependence 

FROM THE EARLY 1950s THROUGH THE LATE 1960s, growing 
economic interdependence provided the major impetus toward sus- 
tained, rapid growth in the world economy. Just 10 years ago, in his last 
Economic Report, President Johnson wrote: 

In the past two decades, enormous progress has been made in building 
a closely knit international economy. Remarkable growth in the volume 
of international commerce has gone hand in hand with sustained world 
prosperity; each has contributed to the other. At times, deep and obvious 
strains in the international monetary system have imperiled this progress, 
but these financial difficulties have been weathered without a serious set- 
back in economic growth or world trade. 

Much has changed throughout the last decade. In some areas the momen- 
tum of the 1960s has continued: an ever-growing share of world produc- 
tion is devoted to international trade. Financial markets have become more 
integrated internationally and have adapted to the task of recycling 
unprecedented flows of funds from surplus to deficit countries. For a few 
countries of the Third World and the southern tier of Europe, rapid export 
growth — and particularly the shift in the composition of exports toward 
manufactured goods- — have occasioned rapid rises in income growth and 
production. 

There have also been fundamental changes in the international economic 
system. The most dramatic change, of course, was the breakdown of the 
Bretton Woods system of pegged exchange rates, and its replacement by a 
system of market-determined flexible exchange rates. This change has. by and 
large, helped the world economy to adjust to the severe problems confronting 
it in the past 5 years — the rise in oil prices and the poor harvests of 1973-74, 
the subsequent serious recession, persistently high and divergent rates of 
inflation in most industrial countries, and the hesitant economic recovery 
outside the United States. 

The evolution of the floating rate regime has given individual countries 
more elbow room for steering their economies in different directions. The 
extent of independence, however, is limited and the need for some coordina- 

135 



tion of economic policies remains. Indeed, to some extent the major lesson 
of 1977 and 1978 is that policy divergences produce severe strains: the rapid 
expansion in the United States relative to other major industrial countries 
triggered a large and potentially destabilizing depreciation of the dollar 
during 1978. The rise in U.S. inflation and the depreciation of the dollar 
led the United States to implement a policy of monetary and fiscal restraint, 
in coordination with a cooperative action to deal with exchange-market 
disturbances. 

A second major change from the picture 10 years ago — and one which 
has been appreciated only slowly — is the pronounced decline in growth 
dynamism of the industrial world. Growth of potential output has been 
retarded, but growth of actual output has fallen even further. Aggregate 
demand has been sluggish throughout the industrial world outside of the 
United States since 1973. Weak investment and cautious consumers gen- 
erally slowed private demand. Yet the need to reduce inflation and the large 
external and public deficits made policy makers cautious. As a result, the 
overall growth in the countries making up the Organization for Economic 
Cooperation and Development (OECD) slowed to an average of 3.0 per- 
cent over the 1973-78 period, compared to 4.9 percent in the preceding 
decade. 

The reasons for the slowdown of potential output are not fully evident. 
The slowing of investment virtually everywhere has resulted in an aging 
capital stock. The growth of trade has slowed, and the earlier economic gains 
from economic integration have not been repeated. In many countries the 
hidden unemployment in agriculture has largely disappeared, leaving little 
of the productivity bonus that accompanies a declining primary sector. 
Clearly the sharp rise in the cost of energy has led to some costly substitution. 
To a lesser extent, generally higher and more volatile commodity prices may 
have retarded some productive sectors. 

Finally, both actual and potential output growth has probably been re- 
strained because of new views concerning the value of change and economic 
growth. Occasionally, a new spirit of "preservationism" has created pressures 
to protect the existing structure of jobs and wages and bolster weak sectors. 
In part, this spirit is a reaction to acute problems in key industries: excess 
capacity in steel, shipbuilding, and textiles, for example, burdens many 
economies. But a more cautious attitude has also increased the difficulties of 
shifting resources from declining to expanding sectors. Preservationist pres- 
sures encourage protectionist trade measures or internal subsidies that could 
make the world economy even less dynamic and more prone to inflation. 
The adventurous spirit that once characterized much industrial activity and 
is vital to rapid structural and economic change may have been suppressed 
at least temporarily by the uncertainties of the recent past. 

Managing interdependence today is a major challenge. We have been 
through a period in which — in contrast to the robust postwar expansion — 
growth potential has declined and inflationary pressures have increased. To 

136 



some extent these conditions may prevail for a number of years. In the past, 
numerous structural factors favored rapid expansion and rising productivity : 
relative commodity and energy prices fell, trade barriers were lowered, new 
technologies came in quickly, and economies of scale were realized. These 
favorable factors have been weakened or reversed. The challenge to policy — 
at home and abroad — is twofold: to steer our economies safely through 
these more hazardous waters and to create conditions that favor sustained 
economic growth. Improved international coordination of domestic policies 
will be essential to accomplish both of these tasks. 

THE GLOBAL ECONOMY: DEVELOPMENTS AND PROSPECTS 

In many ways 1978 can be seen as a year of transition for industrial coun- 
tries. Here in the United States economic growth began to slow after a 
strong recovery earlier. In the other major industrial countries, where re- 
covery had been hesitant, growth accelerated somewhat, though not enough 
to reduce excess capacity substantially or to prevent a continued upward 
drift in unemployment (Chart 9) . 

The inflation rate accelerated in the United States. In most other indus- 
trial countries, inflation rates, which on average exceeded those in the 
United States during 1974-77, continued to decline. As a result, the rate 



Chart 9 



PERCENT 

12 



Unemployment in the U.S. and Five 
Major Industrial Countries 



10 



SEASONALLY ADJUSTED 



,UNITED STATES 



^BIG FIVE-" 



I I I l l : I I I l l l l I I l l l I I I I l I I I I I I l I I I i I I l l l l I I l I M I I l l I 



1973 1974 1975 1976 1977 1978 

-!/ JAPAN. GERMANY. FRANCE. UNITED KINGDOM. AND CANADA DATA ARE 
GNP- WEIGHTED AVERAGE 
SOURCES DEPARTMENT OF LABOR AND COUNCIL OF ECONOMIC ADVISERS 



137 



of inflation in the United States in 1978 was higher than the average level 
for the major foreign countries (Chart 10). 

External positions also changed markedly during 1978. For the OECD 
countries as a group the combined current account deficit declined sharply. 
The deficit of the United States widened somewhat, but this was more than 
offset by the large rise in the combined surplus of the other major countries, 
especially Japan, and a marked decline in the combined deficit of the smaller 
OECD members. Nevertheless as the year progressed there were increasing 
indications that the major imbalance between the positions of the United 
States and Japan was beginning to be reversed. Both the Japanese surplus 
and the U.S. deficit were smaller in the second half of 1978 than in the first 
half. 

The year 1979 should see some correction in the cyclical divergence that 
has arisen since the oil crisis. As shown in Table 3 1 , the anticipated slowing 
of growth in the United States is matched by an expected slight rise of 
growth abroad. For the first time since 1975, growth abroad is likely to 
exceed growth in the United States. ( It should be noted that the growth rates 
presented here are year over year, rather than fourth quarter over fourth 
quarter as generally presented elsewhere in this Report.) 



Chart 10 



Consumer Price Inflation Rate in the 
U.S. and Six Major Industrial Countries 



20 



10 











ANNUAL RATES 








- 




n 
it 

i > 

1 X 

i > 

1 X 


1 
\ 








- 


- 


\ 1 




1 
1 


/> 

* > 

' ' BIG SIX-*/ 






- 


- 


\ / 




— r \ \ i 
\ \ / 
\ w 




* x 
1 s\ 1 


A 


- 


I 


1 1 


I | 


UNITED STATES \ / 
ll i l 1 1 i i 


1 1 1 1 1 


1 





1973 1974 1975 1976 1977 1978 

^PERCENT CHANGE FROM PRECEDING QUARTER AT ANNUAL RATE 

i/JAPAN. GERMANY. FRANCE. UNITED KINGDOM. CANADA. AND ITALY DATA BASED ON 
1977 GNP/GDP WEIGHTS AND EXCHANGE RATES 
SOURCES: DEPARTMENT OF LABOR AND NATIONAL SOURCES. 



138 



Table 31. — Annual growth in real GNP in the United States and other major 
industrial countries, 1960-79 

[Percent change] 



Country 



1960-74 
average 



1975 



1976 



1977 



1978 i 



1979 2 



United States. 
Big Six* 



3.6 
5.8 



-1.3 
-.3 



5.7 
5.4 



4.9 
3.3 



3.9 
3.8 



3.3 
3.9 



i Preliminary. 
1 Forecast. 

3 Japan, Germany, France, United Kingdom, Canada, and Italy; OECD estimates. For 1960-74 average, based on 1970 
GNP/GDP weights and exchange rates; for 1975-79 based on 1977 GNP/GDP weights and exchange rates. 
Sources: Organization for Economic Cooperation and Development and Council of Economic Advisers. 

Inflation rate differentials are also expected to narrow somewhat during 
1979, in line with the anticipated slowing of inflation in the United States 
and a possible increase in inflation in some foreign countries. Trade and 
current account imbalances are expected to diminish further as a result of 
the shift in relative growth and of the large exchange rate movements 
during 1978. 

GROWTH AND INFLATION 

In the major foreign countries there was a modest rise in the growth of 
gross national product (GNP) in 1978. Table 32 records the growth rates of 
GNP during 1977 and 1978 for each of the major foreign countries and the 
United States. Also included are two columns showing the average annual 
growth of GNP prior to 1 974 as well as the average rate of growth since then. 

Table 32. — Annual growth in real GNP in major industrial countries, 1960-78 
| Percent change, except as noted) 



Country 



United States 

Japan 

Germany 

France 

United Kingdom. 

Canada... 

Italy 



1977 



4.9 
5.2 
2.6 
3.0 
1.6 
2.7 
1.7 



1978' 



3.9 
5.8 
3.0 
3.0 
3.0 
3.5 
2.0 



1960-73 
average 



3.9 
10.5 
4.8 
5.7 
3.2 
5.4 
5.2 



1974-78 
average ' 



2.3 

3.7 
1.7 
2.8 
1.0 
3.4 
1.9 



GNP 

shortfall in 1978 

(percent) 2 



8.1 
37.3 
16.0 
14.7 
11.5 
10.2 
17.1 



1 Preliminary. 

2 Difference between actual GNP and the level that would have been reached if growth since 1973 had equaled its 
1960-73 trend rate, expressed as a percent of actual GNP. 

Sources: Organization for Economic Cooperation and Development and Council of Economic Advisers. 

The final column shows the percentage difference between the actual 
GNP in 1978 and the level of GNP that would have existed in 1978 if growth 
had proceeded after 1973 at its 1960-73 trend rate. The gap recorded in the 
last column is not meant to indicate the precise difference between actual 
and potential output. Few deny that potential output growth has slowed 
everywhere in recent years, and in some cases sharply, although considerable 
uncertainty remains about the current underlying trend for potential output. 
What the gap does indicate is that, for whatever reasons, the major indus- 



139 



trial countries outside the United States have witnessed a dramatic reduction 
in growth since the oil crisis. 

Evidence that at least part of the slower growth is due to a slowdown in 
potential growth is shown in Table 33. Each of the large industrial coun- 
tries has shown significantly lower productivity growth in the last 5 years 
compared to the earlier period. Clearly, part of the poor productivity per- 
formance is due to low utilization rates. Even after correcting for utilization 

Table 33. — Annual growth in GNP per employed worker in major industrial 

countries, 1964-78 

[Percent change] 





Country 


Average 




1964-73 


1974-78' 


United States 


1.8 
8.9 
4.7 
4.5 
3.2 
2.4 
5.4 


0.1 


Japan 


3.2 


Germany ... . 


3.0 


France ... . ... . 


3.0 


United Kingdom 


.8 


Canada... . 


.6 


Italy . 


1.1 







i Estimate. 

Source: Organization for Economic Cooperation and Development. 

and recognizing analytical shortcomings in the productivity measure, how- 
ever, some slowdown is evident. The largest absolute decrease occurred in 
Japan, where growth in GNP per worker slowed from 8.9 to 3.4 percent 
annually. 

Whatever the new rates of potential growth may be, the actual GNP 
growth outside the United States was apparently not above the underlying 
potential growth in 1977 and 1978. In the fifth year after the onset of reces- 
sion, recovery toward a fuller utilization of potential among countries outside 
the United States continues to be extremely hesitant and incomplete. 

To some extent the slowing of potential growth and the weakness of 
actual growth relative to potential since 1975 are tied together. In Japan, 
for instance, the sharp fall in potential growth reduced capital requirements 
and hence reduced required investment as a share of output. Because this 
fall was not matched by a decline in the personal saving rate, a problem of 
excess saving emerged. This imbalance was absorbed partly by the rise in 
the external surpluses and government budget deficits and partly by the 
decline in income and production relative to potential output. In Japan, as 
in other countries, low rates of actual investment constitute a major reason 
for the hesitant recovery of demand. At the same time, as mentioned 
earlier, sluggish investment has led to a marked aging in the capital stock 
and has further checked the growth of potential output by limiting produc- 
tivity increases. 

The principal factors constraining more expansionary policies during the 
current recovery have been persistently high rates of inflation in most coun- 
tries and the resulting judgment that relatively cautious fiscal and monetary 

140 



policies were needed. Even in those countries making notable progress in 
reducing inflation by 1977 — particularly Germany and Japan — fear of re- 
newing inflation continued to dampen enthusiasm for more expansionary 
fiscal and monetary policies. 

In 1978 constraints on policies eased somewhat outside the United States 
as rates of inflation declined almost everywhere (Table 34) . For the United 
Kingdom and Italy, where the rates had been highest, the decline was im- 
pressive. As a result of relaxed constraint, fiscal policies also tended to 

Table 34. — Changes in consumer prices in major industrial countries, 1976-78 



[Percent '] 








Country 


1976 


1977 


1978' 


United States - --- 


5.8 
9.3 
4.6 
9.6 

16.6 
7.5 

16.8 


6.5 
8.0 
3.9 
9.5 

15.8 
8.0 

17.0 


7.6 




3.9 




2.7 




9.2 




8.3 




9.0 


Italy - --- 


12.2 







' Changes measured from year average to year average. 
' Estimate. 

Sources: Department of Labor, Board of Governors of the Federal Reserve System, and Council of Economic Advisers. 

become significantly more expansionary in the major foreign countries: 
according to OECD estimates, the direct impact of fiscal policy shifts in 
1978 amounted to over one-half of 1 percent of GNP for the major for- 
eign countries, excluding Japan, and to over 2 percent for Japan. 

The 1978 pattern of changes in growth and inflation rates was heavily in- 
fluenced by the marked decline of the dollar and the consequent appreciation 
of most other major currencies. In countries where exchange rates appreci- 
ated, it is broadly true that GNP growth lagged behind the growth of domes- 
tic demand and that inflation rates declined. In this environment fiscal 
policy became more expansionary during the course of the year. These shifts 
in fiscal policy were both necessary and appropriate. They were necessary 
because extra stimulus was required to offset the negative effect on GNP of 
the adverse shift in real net exports. And they were appropriate because the 
reduction in inflation due to currency appreciation gave policy makers 
breathing room to shift toward more expansionary policies. Moreover in 
Germany, and even more in Japan, a reduction in the current account 
surplus required a shift in policy to make sure that shifts in export and 
import volume would eventually become large enough to offset the effects 
of the currency appreciation on terms of trade. 

For the United States the opposite set of circumstances prevailed. A weak 
external sector, accelerating inflation, rapidly declining unemployment, and 
a depreciating currency made it necessary to shift toward a more restrictive 
fiscal and monetary policy. Indeed, this shift occurred during the year. 

The need to realign and coordinate economic policies, both in the United 
States and abroad, so as to promote external adjustment and reduce diver- 

141 



gences in economic performance across countries was increasingly recognized 
during 1978. In the course of meetings that culminated in the Economic 
Summit at Bonn in July 1978, a significant degree of coordination was 
realized. At the Bonn meeting the leaders of the seven largest industrial 
countries discussed the major goals and problems in the world economy, and 
a Concerted Action Program was devised in which each country made 
appropriate specific commitments. 

The Bonn Summit marked a turning point, particularly for the United 
States. The United States noted that curbing inflation has become the top 
priority of economic policy. The President therefore pledged to take specified 
actions to reduce the U.S. inflation rate, obtain a more rapid reduction in 
our current account deficit, and adopt an energy policy which would, by 
1985, cut our imports of petroleum by 2.5 million barrels per day. 

In addition, Germany and Japan proposed steps to increase growth and 
thus reduce external surpluses : Germany to provide additional fiscal stimu- 
lus totaling 1 percent of GNP; Japan to achieve a 7 percent growth in real 
GNP between March 1978 and March 1979. The other participating coun- 
tries (France, Italy, the United Kingdom, and Canada) , whose high rates of 
inflation provided less scope for specific action, made broadly complementary 
commitments. At the same time, each country recognized the overriding 
importance of not allowing sluggish growth, sectoral difficulties, or trade 
imbalances to serve as pretexts for actions that would undermine the frame- 
work of free trade among nations. A joint commitment, covered more fully 
later in this chapter, was adopted to secure a rapid and successful outcome 
for the Multilateral Trade Negotiations. 

Considerable progress has been made in meeting these commitments. As 
discussed earlier in this Report, the United States has in place a major 
anti-inflation program and has shifted both fiscal and monetary policies 
toward restraint. The 1978 National Energy Act, signed at year's end, 
establishes a comprehensive framework for rationalizing energy policy and 
reducing oil imports along the lines discussed at Bonn. Germany completed 
legislation in December 1978 that fully implements its own commitment. 
Although Japan began in September to carry out a supplementary fiscal 
program to stimulate growth, it now seems likely to fall well below the 7 
percent growth target. 

The Concerted Action Program adopted at Bonn marks an important 
step in international economic cooperation. On a substantive plane, the 
measures taken helped put the major economies onto more balanced and 
sustainable paths. More important is the symbolic significance: it is now 
clearly recognized at home and abroad that, in a world where countries 
are interdependent, policy choices by one nation directly affect economic 
performance in others. If some countries grow very slowly, their trading 
partners will be forced to abandon dynamic export industries; if one 
country attempts to protect its industries, at the border or by domestic 

142 



subsidies, others will have to retrench; if one nation pursues extremely 
rapid growth or inflationary policies, the resulting exchange rate deprecia- 
tion may lead to uncertainties and market disorders. Increasing awareness 
of these linkages and acceptance of the responsibilities they imply represent 
the goal of policy coordination exemplified by the Summit. 

PROSPECTS 

Although the shift toward more rapid growth abroad is a welcome devel- 
opment, the world economy continues to face difficult challenges. GNP 
growth, while expected to maintain the 1978 rates, will remain low by the 
standards of the 1960s, and it will be hard to generate enough jobs to 
reduce unemployment. In some countries more extensive use of specific job 
programs and special incentives to reduce structural unemployment of young 
workers must effectively supplement demand management policies if further 
increases in unemployment are to be avoided. 

Most economies also face excess capacity in basic industries such as steel, 
textiles, and shipbuilding. The consolidation of these sectors by reducing 
capacity, and the resulting loss of jobs, aggravate labor market problems. 
Ways must therefore be found to smooth the transfer of workers from declin- 
ing to expanding sectors. Securing a more rapid rate of job creation is made 
harder by continued low rates of investment in plant and equipment. While 
some growth in investment occurred in 1978, the basic circumstances have 
not changed substantially. Excess capacity remains large and prospects indi- 
cate only a moderate growth in demand. In this environment a sharp accel- 
eration of investment during 1979 is not foreseen. 

While faster growth would greatly benefit most foreign economies, infla- 
tion rates in all but a few OECD countries remain too high for governments 
to pursue policies that are significantly more expansionary. Even relatively 
restrictive macroeconomic policies will bring only a gradual decline in in- 
flation. In some countries inflation may accelerate again as the favorable 
effects of exchange rate appreciation and commodity price declines wear 
off. 

Thus, despite some easing of constraints on policy in countries outside the 
United States, the economic environment presents difficulties. Few easy solu- 
tions are available; and according to an increasing number of observers, it 
will take a continued effort to bring about conditions more favorable to 
sustained economic growth. 

CURRENT ACCOUNT DEVELOPMENTS AND PROSPECTS 

In 1978 there were marked changes in global payments positions (Table 
35). First, the large current account surplus of the countries making up the 
Organization of Petroleum Exporting Countries (OPEC) diminished sharply 
and unexpectedly from about $32 billion in 1977 to an estimated $1 1 billion 
in 1978. 

143 



Taele 35. — World current account balance,' 1975-78 
[Billions of dollars) 



Country 


1975 


1976 


1977 


1978 = 




0.3 

18.4 
-3.8 
-14.3 

27.3 

-38.5 

10.9 


-19.0 

4.3 
-3.7 
-19.4 

37.0 

-26.0 

8.0 


-27.5 

-15.3 

13.5 

-25.7 

31.5 

-24.0 

20.0 


0.5 




-17.0 


Big Six 3 and Switzerland 


33.5 


Other OECD 


-16.0 




11.0 




-34.0 


Other* 


22.5 







i OECD basis. 

2 Estimate. 

' Japan, Germany, France, United Kingdom, Canada, and Italy. 

4 Reflects errors and asymmetries, as well as balances with omitted country groups. 

Sources: Organization for Economic Cooperation and Development and Council of Economic Advisers. 

This remarkable decline resulted from volume and price effects in about 
equal measure. The volume of OPEC oil exports actually fell somewhat in 
1978, a consequence of the slackened pace of growth in energy demand in 
the industrial countries and the rapid 1978 expansion of other sources of 
oil. North Sea, Alaskan, and increased Mexican production, accounted 
together for a rise in production of 1.2 million barrels per day, or roughly 
4 percent of total OPEC production. 

At the same time, the volume of imports into OPEC countries continued 
to grow at a significant though slowing rate, a result of the momentum of on- 
going development plans in a number of OPEC countries. Price move- 
ments have also been important in reducing the OPEC surplus. The dollar 
price of oil remained roughly constant, while import prices rose. 

Second, in the so-called non-oil developing countries (that is, the poorer 
countries outside of OPEC and the OECD) the combined deficit expanded 
considerably last year. The terms of trade, which had been generally fav- 
orable in 1977, turned against such countries in late 1977 and early 1978. 
Late last year, however, the terms of trade again strengthened appreci- 
ably. Borrowing conditions for most of these developing countries remained 
,favorable, and many of them borrowed substantial amounts to service out- 
standing debt, maintain the growth of their imports, and increase their gross 
reserves for the third consecutive year. 

The most striking change in 1978, however, was the disappearance of the 
OECD deficit. The aggregate deficit of the OECD countries, $28 billion in 
1977, gave way to a small surplus in 1978. This turnaround was the second 
largest recorded year-to-year change in the OECD external position ; it was 
exceeded only by the large shift from surplus to deficit which followed the 
OPEC price rise. It was surprising that the decline passed virtually unno- 
ticed and had little effect on developments during the year compared to 
those occurring in the 1974-75 period. 

The OECD can be usefully divided into three groups. The first comprises 
countries in surplus; the second contains small countries, chiefly in deficit; 



144 



and the United States is the third. Starting with the surplus countries, one 
should note that the largest part of the decline in the OECD deficit is ac- 
counted for by the rise in the combined surpluses of Japan, Germany, France, 
Italy, and Switzerland. These countries, along with the United Kingdom, 
experienced strong gains in their terms of trade — that is, the prices received 
for exports rose more rapidly than prices paid for imports, principally be- 
cause of appreciation in their exchange rates. 

A gain in the terms of trade affects the favored country in two ways. First, 
it increases income and thus tends to have a stimulating effect on aggregate 
demand similar to that of a tax cut. Second, after some time, however, the 
higher export prices tend to depress the volume of exports, while the lower 
import prices tend to raise the volume of imports, thereby reducing aggre- 
gate demand. Table 36 records the movement in current account balances 
for each of the countries named above, except Switzerland, and shows the 
relative size of the two different effects in 1978: the ratio between the gain 
in terms of trade and domestic demand, and the ratio between the change 
in the volume of net exports and GNP. 

Table 36. — Current account balances for selected major industrial countries, 1976-78 



Country 


Current account balance ■ 


Gain in terms 

of trade as 

percent of 

domestic 

demand, 

1978U 


Change in 

volume of net 

exports as 

percent of 




1976 


1977 


1978 2 


real GNP, 
1978 2 




Billions of dollars 


Percent 


Japan 


3.7 

3.8 

-6.1 

-2.0 

-2.8 


10.9 

3.7 

-3.3 

.5 

2.3 


20.0 
6.0 
2.0 
-.5 
5.5 


1.9 
.6 
.8 

1.2 
.4 


-0.3 




-.3 




.3 




-1.0 


Italy 


.8 







' OECD basis 

2 Estimate. 

3 The gain in terms of trade is the percent change in export prices times 1977 export value minus the percent change 
in import prices times 1977 import value. 

Sources: Organization for Economic Cooperation and Development and Ccuncil of Economic Advisers. 

Even though estimation of gains in terms of trade is subject to a consider- 
able margin of error because of serious measurement difficulties, the results 
are striking. These five countries experienced very large gains in income from 
the terms of trade in 1978 and, excepting the United Kingdom, had little 
or no offset from the declining volume of net exports. The income gains, how- 
ever, do not appear to have been matched by a corresponding rise in the 
growth of real output, especially when allowance is also made for the expan- 
sionary shifts in fiscal policy. A possible explanation for this relatively weak 
multiplier effect is that, because these income gains were perceived to be 
transitory, they were largely absorbed in increased household and corporate 
saving, rather than in increased expenditures. 

The second group of OECD countries, comprising the smaller nations, 
in the aggregate reduced their deficits in 1978 by about $10 billion. This 



145 



reduction was especially welcome in view of the very large deficits these 
countries had run from 1974 to 1978, when their net indebtedness grew 
by close to $80 billion. Indeed, external positions had become unsustainable 
for a number of countries in this group and severe retrenchment was neces- 
sary. Stabilization programs were developed in connection with upper credit- 
tranche drawings from the International Monetary Fund for Portugal and 
Turkey. Governments in the Scandinavian countries acted to forestall fur- 
ther accumulation of debt that might well have become a source of dif- 
ficulty in a few years. For still others, the extent of improvement in their 
current account was limited by adverse shifts in the terms of trade stemming 
from the fall in a number of raw materials prices. For the group as a whole, 
the decline in current account deficits can be explained almost entirely 
by the reduction in import volumes relative to export volumes. 

The United States stands alone in the third category. Throughout the 
postwar period the growth of U.S. imports tended to be greater in relation to 
domestic growth than the growth of exports in relation to growth abroad. 
Until 1975 a rough balance between import and export growth was main- 
tained by the fact that growth abroad tended to exceed U.S. growth. From 
1975 through 1978, however, growth in the United States surpassed the aver- 
age growth abroad. As a result, the current account of the United States 
shifted sharply. In 1977, a year in which U.S. economic growth exceeded 
that of its trading partners bv about \]/2 percentage points, the U.S. current 
account shifted by almost $20 billion, from a surplus of $4.3 billion to a 
deficit of $15.3 billion. Roughly three-fourths of this shift is accounted for by 
the more rapid growth of merchandise import volumes compared to export 
volumes. The remainder of this shift reflected changes in the terms of trade 
and in the composition of trade, only partly offset by gains in service trans- 
actions. 

On the basis of preliminary estimates the current account shifted toward 
deficit in 1978 by a further $1.7 billion. There was, however, substantial 
improvement from the first half of the year to the second, when growth 
in export volume picked up and import growth began to moderate. Despite 
the depreciation of the dollar during this period, the expected adverse shift 
in the terms of trade was restrained to a significant degree by the constancy 
of the price of oil imports and by the general increase in the prices of manu- 
factured goods relative to the prices of primary commodities. 

The shifts that occurred in 1978 in current account positions among 
the countries of OPEC, the non-oil developing countries, and the OECD 
countries are not likely to be reversed in 1979. The large oil price increase 
announced by OPEC last December will seriously complicate the task of 
economic management in the industrial and non-oil developing countries. 
This price increase is not expected to result in a substantial widening of 
the OPEC surplus from 1978 levels, however, since imports by OPEC will 
also continue to rise. It can be said that the industrial countries are now pay- 
ing the "OPEC oil tax" largely in current goods and services rather than 

146 



I O Us. As a result, the so-called recycling problem has become much less 
troublesome — though the surpluses of a few individual OPEC countries will 
continue for years to come. More generally, the traditional pattern of re- 
source flows between countries, in which the major industrial countries are 
net capital exporters to the developing countries and to other poorer coun- 
tries within the OECD, appears to have been firmly reestablished. 

Barring a substantial run-up in commodity prices, the deficits of the non- 
oil developing countries are likely to rise somewhat in 1979. Such a rise in 
deficits would appear to be consistent with the strong liquidity positions of 
many countries in this group, the ability of a growing number of countries to 
borrow successfully on international financial markets at lower interest 
spreads and longer maturities, and the apparent willingness of banks to 
increase their lending to developing countries despite a few isolated debt 
rescheduling problems during 1978. 

Among industrial countries of the OECD, a more balanced distribution 
of surpluses and deficits is likely to emerge in 1979. The U.S. current account 
deficit is expected to decline considerably from the levels at the end of 1978, 
dropping to about an annual rate of $2-$8 billion by the end of 1979. This 
reduction will result from two conditions: first, the effects of slower U.S. 
economic growth on imports; and second, a steady and vigorous growth in 
exports as markets continue to adjust to the improved price competi- 
tiveness of American goods and services that resulted from last year's de- 
preciation of the dollar. 

Some decline, too, is anticipated in the surpluses of Japan and Germany. 
Expectations for the decline of the Japanese surplus are grounded primarily 
in the anticipation of a further fall in the volume of Japanese exports. Im- 
port volumes rose only moderately in 1978 after allowance for large account- 
ing transactions made under the emergency import program. They are un- 
likely to accelerate strongly this year, despite the appreciation of the yen, 
because of the relatively closed structure of many Japanese import markets. 
This one-sidedness in adjustment by Japan is likely to intensify the difficulty 
of reducing the Japanese surplus to a sustainable level over a longer period. 
The need for a sustained reduction of barriers in Japanese import markets is 
well recognized by Japanese officials, and extensive discussion between 
Japan and the United States during 1978 has laid the groundwork for 
progress toward this end. 

INTERNATIONAL FINANCIAL DEVELOPMENTS 

For the international financial markets 1978 was a year of unusual in- 
stability. Serious questions were raised at home and abroad about the func- 
tioning of foreign exchange markets, culminating at year-end with the 
charter of the new European Monetary System and with the dollar support 
measures of the United States. These developments were responses to in- 
creased volatility and to disorderly conditions in the foreign exchange mar- 

147 



kets. In the case of the European Monetary System they arose also from 
concern about the undesirable side effects of a system of floating exchange 
rates for closely integrated economies and from the need to foster closer 
economic integration in Europe. 

THE OPERATION OF FLEXIBLE EXCHANGE RATES 

The developments of 1978 must be seen as a part of the continued evolu- 
tion of international financial arrangements. It is therefore appropriate to 
begin this discussion by reviewing the role of floating exchange rates in 
macroeconomic adjustment over the 1973-78 period. 

Floating Rates in Principle 

The role of floating exchange rates can best be seen in the need for adjust- 
ment among national economies. All countries are continually subjected to 
shocks that lead both to internal imbalances (excessive or deficient utiliza- 
tion of domestic resources) and to external imbalances (foreign trade or 
capital flows at unsustainable levels) . A system of flexible, market-deter- 
mined exchange rates (or, in short, "floating" rates) allows more automatic 
external adjustment than a system of fixed parities, and thus leaves more 
scope for domestic macroeconomic policies to adapt to the changing re- 
quirements for internal balance. 

External adjustment occurs as exchange rates move to equilibrate trade 
and net capital flows. More precisely, for a given change in official holdings, 
the rate will move to a level that either brings the value of goods and serv- 
ices exported and imported into balance or induces changes in private asset 
holdings to finance the discrepancy. 

The equilibrating mechanism works on both the capital and current ac- 
counts. For a country incurring a large current account deficit, the currency 
depreciates to reduce the current account deficit by increasing the country's 
price competitiveness. That process, however, takes time. In the interim, 
currency movements will induce private holders of wealth to accumulate 
the country's assets to the extent necessary to finance the deficit. 

The second feature of an idealized system of floating exchange rates can 
be seen as a consequence of the first. Because floating rates tend to assure 
external equilibrium, countries can enjoy greater independence of macro- 
economic policies and performance. Under a regime of fixed exchange rates, 
the extent to which a country's macroeconomic policies could diverge from 
those of its trading partners was limited in important ways. Divergent 
policies would lead to trade imbalances, with expansionary countries moving 
toward deficit and restrictive countries toward surplus. There was no auto- 
matic mechanism to generate the needed capital movements to support the 
imbalances. Indeed, outflows of capital from countries pursuing relatively 
expansionary policies to countries pursuing restrictive policies sometimes 
exacerbated disequilibria in overall balance of payments positions. A coun- 

148 



try's freedom to engage in independent macroeconomic policies was thus 
constrained by its capacity to absorb or lose reserves. 

Under a floating rate regime, however, wide divergences of macro- 
economic policies would, in principle, be possible. For those countries 
pursuing rapid growth through expansionary macroeconomic policies or 
those accepting high inflation, the presence of a depreciating currency would 
allow the balance of payments to remain close to equilibrium. 

Critiques of Floating Rates 

For more than 5 years the major economies have functioned under a 
floating rate regime. The new regime has been successful in permitting the 
industrial economies to absorb shocks that were unprecedented in the post- 
war period. At the same time, overall economic performance and exchange 
market behavior have been much less satisfactory than was expected, leading 
many to wonder whether the exchange rate regime was at least partly 
responsible for the poor performance. 

Critics have argued that floating rates have had four failings: they have 
not eliminated balance of payments disequilibria; they have not allowed 
the degree of policy independence that had been anticipated; they have 
proved inflationary; and they have introduced major new elements of 
instability and uncertainty to financial markets. 

First, floating rates clearly have not eliminated current account surpluses 
and deficits. These deficits and surpluses have not, in general, fallen from 
the levels of the late 1960s and early 1970s and, on many occasions, some 
have been even higher. 

Such an observation, however, does not imply a failure of floating rates 
to perform their adjustment function. The imbalances that have occurred 
have not usually resulted from floating per se, but from the greater divergence 
of macroeconomic performances and from the exceptionally large shocks to 
the international system, such as OPEC price rises and large increases in 
agricultural and commodity prices. Exchange rate changes have generally 
responded well to these deficits and surpluses and have helped to move 
economies back toward external equilibrium, even if not as quickly or as 
smoothly as originally hoped. A balance of payments equilibrium, more- 
over, does not necessarily require that the current (or trade) account should 
be balanced, only that the current or trade account deficit or surplus be 
willingly financed. In fact, deficits or surpluses on current account may well 
represent the equilibrating counterpart to structural or "autonomous" 
capital inflows or outflows. 

In contrast, during the final years of the Bretton Woods system, balance 
of payments disequilibria that resulted at least partly from divergent macro- 
economic performances led to several serious and protracted balance of 
payments crises. Normal trade and investment patterns were disrupted as 
governments responded to these disequilibrium situations by imposing trade 

149 



and capital controls and other emergency measures before they were finally 
forced to change their exchange rate parities. 

A second cause of concern exists because floating has led to less policy 
independence than had been anticipated. To be sure, countries have been 
significantly more independent than in prior years, especially in the realm 
of monetary policies. A good example lies in the ability of Germany, during 
the early phase of the current expansion, to pursue a relatively restrictive 
monetary policy, while that of the United States was relatively expansionary. 

Although independence has been greater than with fixed rates, it 
has by no means been complete under floating. There have been obvious 
limitations to policy flexibility, partly because exchange rate changes cannot 
insulate national economies from their partners' performance or from inter- 
national economic shocks. We have learned that in an increasingly inter- 
dependent international economic system floating exchange rates do not free 
countries from the effects of their neighbors' economic policies and per- 
formances. Similarly, countries must recognize their responsibility to act in 
ways that do not inflict excessive adjustment costs on others. 

The third major criticism of the floating rate system has been that it 
contains an inflationary bias. Two lines of argument have been presented 
to support this view: first, that floating generates inflation because it fails 
to impose needed discipline on the conduct of fiscal and monetary policies ; 
second, that because of asymmetries and ratchets the increased inflationary 
pressures associated with depreciation are not matched by commensurate 
downward price pressures in countries whose exchange rates are appreciat- 
ing. Thus, it is argued, the net effect of exchange rate changes is inflationary 
for the world as a whole. 

Neither of these arguments is entirely convincing. Regarding the first 
argument — presumed lack of discipline — it is important to note that even 
without external pressures there are clearly powerful internal forces which 
oppose inflation. Recent experience in the United States and some countries 
of Europe, where large current account deficits and currency depreciations 
have led to quite restrictive economic policies, indicates the extent to which 
difficult stabilization policies will be undertaken even in a flexible exchange 
rate system. 

Moreover, a regime of fixed rates allows inflation to spill over the borders. 
Price rises originating in one country spill over into other countries directly 
if exchange rates cannot shift. Indeed, to the extent that inflation originat- 
ing in one country is shared by others when exchange rates are fixed, disci- 
pline in the conduct of fiscal and monetary policies may be weaker than 
under floating rates, where the full inflationary impact of inappropriate pol- 
icies is felt domestically. 

The evidence to support the second argument — that there are asym- 
metries in the effects of exchange rate changes on inflation — is mixed. While 
it is true that there exists considerable evidence of increasing downward 
rigidity in the levels of prices and wages in a number of countries, there is 

150 



no comparable evidence that rates of inflation are less responsive to currency 
appreciation than to depreciation. 

Finally, factors other than floating exchange rates provide a more com- 
pelling explanation for the high and persistent inflation in the industrial 
countries : slower productivity growth, excessive demand pressures, external 
shocks such as those created by OPEC, and structural changes and rigidities 
in domestic labor and product markets. 

A final criticism of floating has been that it induces excessive volatility 
in exchange rate movements. Chart 11 presents the path of the trade- 
weighted dollar since 1970, using an index of dollar movements against the 
10 major currencies, and 1972-76 total multilateral trade shares as weights. 
In addition to these longer-run swings in rates, it is certainly true that day- 
to-day movements in exchange rates have been larger in the float than in the 
preceding Bretton Woods era. It is difficult to determine whether these 
movements have been excessive. In a fixed rate system such as 
Bretton Woods, day-to-day variability is sharply reduced by the active 
intervention of central banks to keep the rate within a narrow range. Fur- 
thermore, for as long as the range remains credible, private actions tend to 
keep the rate within the range whenever transient factors lead to a rate 
movement to the upper or lower limit. Day-to-day variability is thus largely 
eliminated. On the other hand, the fixing of exchange rates while economic 
conditions are changing makes it likely that exchange rates will increasingly 



Chart 11 



Weighted-Average Exchange Value 
of the U.S. Dollar 



INDEX. MARCH 1973 = 100 



110 - 




80 



mi In ml iiniliiiiili i ml Ii iiiiliniiliiii ilm nl I Iimiln ml [Mi lium I inn 



1970 1971 1972 1973 1974 1975 1976 1977 1978 

SOURCE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. 

151 



diverge from levels that would be consistent with underlying economic 
factors. Eventually the credibility of the range is challenged by market par- 
ticipants, and potentially disruptive speculative attacks can then occur until 
rates are forced to new, more appropriate levels. 

In a floating rate system, day-to-day variability of exchange rates is inevi- 
table as market participants respond to new information about economic 
developments that alters their perceptions about appropriate exchange 
rate patterns. Indeed, these day-to-day movements in principle constitute 
the means of accomplishing longer-run adjustment of exchange rates to 
changing economic circumstances. This fundamental role of exchange rate 
movements raises the question whether the observed short-run variability of 
exchange rates has been larger than was required to allow the necessary 
medium-term flexibility. This question is complex and has not been thor- 
oughly addressed. A preliminary examination of recent experience and 
related studies by the Council of Economic Advisers has uncovered mixed 
evidence. In some cases, short-run variability over the last 5 years has been 
broadly commensurate with longer-run changes, while in other cases short- 
run changes have been less than might be consistent with the longer run. No 
cases of persistent, excessive volatility were found. 

There is a sense in which the floating rate system itself may have led to 
excessive volatility — through the relaxed constraints on macroeconomic 
behavior. As noted above, a floating rate system allows greater divergence 
in macroeconomic experience. Unfortunately, when greater scope for 
divergent policies and performance is allowed, market uncertainty about 
appropriate exchange rates is also increased. The uncertainty, in turn, can 
cause market exchange rates to move in an erratic and disorderly fashion 
as market participants react, and overreact, to transitory bits of information 
and rumors. 

Greater exchange rate noise and uncertainty are among the costs of a 
floating rate system. Achievement of greater stability in exchange rate 
markets is dependent on the closer and more effective coordination of macro- 
economic policies among countries and on the continuing efforts of each 
country to sustain macroeconomic policies that are consistent with internal 
and external adjustment. 

In general, however, the evidence, although not conclusive, does indi- 
cate that floating has worked well over the long run, especially consider- 
ing the magnitude of the shocks to the international financial system. In 
fact, given these shocks, it is not clear that any system other than generalized 
floating would have been viable during the period. Exchange rate move- 
ments, while large, have broadly responded to economic fundamentals, 
have facilitated adjustment, and have tended to move the system toward 
rather than away from greater stability. If exchange rates are at present too 
volatile for some countries, steps to increase the coordination of macro- 

152 



economic policies could be helpful. Recognition of the current level of 
interdependence through improved coordination across countries may help 
to bring greater stability to the foreign exchange markets as well as to pro- 
vide an international environment that is favorable to domestic policy goals. 

IMPORTANT 1978 DEVELOPMENTS 

The summer and fall of 1977 marked the beginning of a protracted fall 
in the value of the dollar and an increase in the day-to-day volatility of 
exchange rates in general. Both of these trends continued through the first 
3 quarters of 1978. 

The Variability of Exchange Rates and Depreciation of the Dollar 

The extent of exchange rate variability can be seen in the average day-to- 
day change of major currencies. In general the daily variation in exchange 
rates decreased between 1973 and 1975, remained comparatively small from 
1975 to about the middle of 1977, and then increased markedly in the sec- 
ond half of 1977 and in 1978 (Chart 12) . 

The decline in variability from 1974 to the 1975-77 period is probably due 
to a lessening of shocks to the world economy and the gradually growing 
ability of market participants to work with a regime of floating rates. The 

Chart 12 

Monthly Average of Daily Exchange Rate Changes 



PERCENT CHANGE 

1.6 

1.4 

1.2 



1.0 
.8 
.6 
.4 
.2 



w 

IS 



!A8 

w 





I i i i i i I iVr^i i'I i I i i i I 1 ii i i i I i ii ii 1 i i i i i I i i i ii 1 1 I I I I I I I I I I I I 

1973 1974 1975 1976 1977 1978 

SOURCE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM 



153 



source of the sudden increase since late 1977 is less clear. Only to a small ex- 
tent can it be explained by the fact that the computed variability is somewhat 
amplified when the level of the exchange rate is moving sharply in one direc- 
tion rather than fluctuating around a steady trend. A more plausible explana- 
tion was the heightened uncertainty about the dollar's future equilibrium 
level in view of the growing current account deficit, a subsequent accelera- 
tion in inflation in the United States, and, for a time, uncertainty about the 
response of U.S. economic policies to these developments. 

The value of the dollar also began to change dramatically in late 1977. 
Chart 11 shows the trade-weighted value of the dollar against the major 
currencies for 1970-78. Two distinct periods can be identified during the 
recent experience. From September 1977 through March 1978 the dollar 
fell by 8.7 percent on a weighted average basis against other currencies. 
During this period the markets tended to focus on the rapid widening of the 
U.S. trade and current account deficits and their expected persistence. Even 
though a substantial portion of the deficits could be accounted for by the 
cyclical position of the United States relative to its major trading partners, 
growth forecasts suggested that this cyclical divergence would not soon be 
eliminated. 

After a brief period of leveling off in April and May 1978, a second dollar 
decline began in early June and carried through until the end of October. 
Some part of this renewed decline can be accounted for by the acceleration 
and persistence of inflation in the United States, which aroused much con- 
cern in international financial circles. From a purely technical point of view, 
this is not a sufficient explanation, however, since the inflation rate in the 
United States, while substantially higher than that in Germany, Switzerland, 
and Japan, was not much higher than the average level among all our major 
trading partners. And the parallel shift in interest rate differentials in favor 
of the dollar was more dian sufficient to offset the change in underlying in- 
flation in the United States. Finally, the dollar's fall came in the face of 
increasing evidence that the U.S. current account position was improving 
markedly. 

By the end of October, then, there was considerable evidence that the 
primary reason for the dollar's fall was the uncertainty in foreign exchange 
markets. Little attention was paid to the anti-inflation message on Octo- 
ber 24. Market participants continued to shift out of dollars despite an appar- 
ent consensus of market expectations that the dollar was undervalued from a 
long-run point of view. Almost all market participants commenting in the 
press or in discussions during the fall of 1978 expected an eventual turn- 
around of the dollar. Only the timing and the duration of the expected 
recovery were uncertain. Market participants, however, were highly uncer- 
tain about the future course of U.S. macroe^ncmic policy, and this uncer- 
tainty encouraged shifts out of dollars because it made the dollar a riskier, 
and hence less attractive, asset. 

154 



THE NOVEMBER 1 INITIATIVE 

On November 1 the Administration and the Federal. Reserve imple- 
mented a strong dollar support program. Its basis was the judgment that, 
whereas some of the earlier 1977-78 dollar decline had been necessary to 
correct the external disequilibrium, the continued decline of the dollar had 
become disorderly and was not justified by fundamental economic condi- 
tions. On the contrary, all the econometric evidence, the government fore- 
casts, and the private forecasts indicated that the U.S. current account 
deficit was likely to narrow sharply in 1979. Indeed, it had already fallen 
from the levels reached in the first half of 1978. 

The dollar depreciation from September 1977 through the summer of 
1978, combined with U.S. economic policies recently put in place — the 
National Energy Act, a new national export policy, the shift toward more 
restrictive monetary and fiscal policies, and the other elements of the anti- 
inflation program — was thought likely to be effective in slowing inflation 
at home and bringing about a more appropriate external balance. Further 
dollar depreciation, especially that induced not by fundamental economic 
factors but by uncertainty about future exchange rates or policies, was 
therefore unnecessary for adjustment and would have led to a misalloca- 
tion of resources at home and abroad, possibly even to serious instability in 
the financial system. Such movements would have added further to U.S. 
inflationary pressures and thus harmed the prospects for the anti-inflation 
program. They could also create the kind of instabilities in exchange mar- 
kets that could threaten economic prospects in other countries. 

In the. light of these considerations, the United States announced a dollar 
support package that contained two parts. First, the United States mobilized 
$30 billion in resources as its share of a joint intervention program with Ger- 
many, Japan, and Switzerland. Second, the Federal Reserve tightened 
domestic monetary policy by raising the discount rate from 8/2 to 9 J/2 per- 
cent and by imposing a 2 percent supplementary reserve requirement on large 
time deposits. The Federal funds rate also rose from 9^j to 9% percent on 
November 1. 

The $30-billion intervention package comprised several different items: 

(1) the Treasury's drawings on our International Monetary Fund reserve 
position of $2 billion and $1 billion in Deutschemarks and yen respectively; 

(2) the Treasury's sales of a total of $2 billion of special drawing rights to 
Germany, Japan, and Switzerland; (3) a doubling of the Federal Reserve 
swap lines with Germany, Japan, and Switzerland — to $6 billion, $5 billion, 
and $4 billion respectively; and (4) the Treasury's commitment to issue 
up to $10 billion in foreign currency denominated securities in foreign private 
markets. 

The markets responded favorably to the dollar support policy. By the end 
of the first week of the program, the trade-weighted dollar was 7.7 percent 
higher than it had been at its low point at the close of business on October 
30. By November 30 it had risen an additional 2.4 percent; and, while some 

155 



declines occurred in December and early January — principally with the 
news of the OPEC price increases and the instabilities in Iran — by the mid- 
dle of January it was again roughly 7.7 percent above its October low. Thus 
the foreign exchange markets at the beginning of 1979 were clearly in a dif- 
ferent condition from what they were in the summer and fall of 1978. The 
one-way speculation had largely ended, and economic fundamentals ap- 
peared to be much more important market factors than they had been 2 or 
3 months before. Market participants, who had been primarily concerned 
about preventing further foreign exchange losses and uncertain about the 
specific timing of an expected dollar upturn, were now taking a more 
healthy wait-and-see attitude about the future course of market funda- 
mentals. The November 1 action, bolstered by the greater certainty that it 
generated, appears to have achieved its basic purpose. In the period ahead 
the value of the dollar should depend on sustained progress in the U.S. 
trade and current accounts and on the success of the new anti-inflation pro- 
gram, rather than on the level of market uncertainty. 

While the dollar's decline in the fall of 1978 was an instance of a mal- 
functioning of exchange markets, the overall history of exchange rates in 
recent years does not suggest that such malfunctions are chronic. Rather, 
they are temporary but acute symptoms that are most likely to develop when 
general macroeconomic conditions are diverging, or in transition, thereby 
generating greater uncertainty about future economic conditions and poli- 
cies and an increased dispersion in expectations about future exchange rates. 
Conversely, as general macroeconomic conditions and policy directions 
become better established, exchange markets can be expected to perform 
more smoothly their function of adjusting rate levels to such economic 
divergences as remain between countries. Such a calming of exchange 
markets may take time and may require considerable further efforts toward 
coordinating macroeconomic policies across countries. Excessive market 
sensitivity, built up during periods of disorderly movement, is likely to induce 
continued higher than normal variability in rate movements until accumu- 
lated evidence of greater underlying stability becomes firmly established. 

THE EUROPEAN MONETARY SYSTEM 

The members of the European Economic Community reached agreement 
on a new European Monetary System expected to be implemented in 
1979. The development of this system is consistent with the Community's 
continued efforts to work toward economic and political unification and with 
its members' concern about the negative effects on economic activity and 
investment of what they consider increasingly excessive and unnecessary 
volatility in exchange rates. 

In the short run this new agreement amounts to adding France, Ireland, 
and Italy to the Snake arrangement of the Benelux nations, Denmark, and 
West Germany, with Norway dropping out. There will be expanded credit 
arrangements and increased margins around parity changes (up to 6 percent 

156 



for new members) as well as greater flexibility for parity changes. The 
United Kingdom, which initially will participate in only part of the system, 
may become a full member later in 1979. The European Monetary System 
is considered by many participants to be an important step toward a full- 
fledged monetary union of the European Community countries, with fixed 
exchange rates, a European Currency Unit for use as a numeraire as well as 
for intra-Community central bank settlements, and a European Monetary 
Fund with comprehensive credit facilities. 

In the early part of its existence, any system of fixed exchange rates must 
concern itself with the establishment of consistent rate patterns and adjust- 
ment mechanisms. Otherwise, whenever rate patterns or fundamental 
economic conditions appear unsustainable, market participants are likely 
to test the weakest and strongest currencies. Judging from past efforts, gov- 
ernments can sometimes forestall such attacks by judiciously adjusting cen- 
tral rates when economic conditions warrant such action. The adjustment of 
central rates, however, cannot be too frequent, for then future changes 
would tend to become anticipated by the market, and the self-stabilizing 
property of the system — which is its major benefit — would be dissipated. 
On the other hand, if rate adjustments become too infrequent, funda- 
mental disequilibria will become so large as to attract massive, and success- 
ful, speculative attacks. 

To maintain a fixed-margin arrangement, therefore, it is necessary to 
forestall situations in which central rates cease to be credible and to do this 
by working actively toward convergence of macroeconomic conditions and 
policies. For the countries of the European Monetary System, this necessity 
is clearly recognized. Indeed, to some extent the European Monetary System 
was regarded as an instrument for achieving precisely this sort of conver- 
gence. Its success will depend in the shorter run on its flexibility, the viability 
of its credit arrangements, and the eventual full-time membership of all 
Community members, and in the longer run on the convergence of member 
countries' macroeconomic policies and economic conditions. 

THE CHANGING ENVIRONMENT OF WORLD TRADE 

Until recently, the postwar period has been one of very high growth of 
national economies and improved living standards. One of the major sources 
of this vitality has been the progressive dismantling of trade barriers. Each of 
the three major industrial regions (North America, Europe, and Japan) has 
experienced increased trade flows. This increase is due in large part to the 
vision of those who built the Common Market, progressively opened up the 
Japanese economy, and sustained the Kennedy Round of multilateral tariff 
reductions. 

During the last decade, however, movement toward increased competi- 
tion in international markets has flagged. Indeed since 1974 there has been 
some regression in trade policies. In response, the United States, along with 
governments of other major industrial countries, has committed itself to pro- 

157 



moting free trade and reducing protectionist pressures around the world. 
The aims of U.S. trade policy are to enable the United States and other 
economies to benefit from the most efficient allocation of worldwide re- 
sources and to channel U.S. resources into sectors of comparative advantage. 
In 1978 the major activities of U.S. policy makers in this area involved the 
Multilateral Trade Negotiations in Geneva, the determination of domestic 
trade policy, and the development of the President's National Export Policy. 
In recent years the growing economic interdependence in the international 
community, along with an increasing incidence of shocks and resulting ad- 
justment policies, has led to an increasing number of trade problems around 
the world and consequently to more cases of overt or indirect protection and 
reaction. These trade problems and increasing protectionist pressures have 
several causes : the emergence of newly industrialized nations who are com- 
peting to gain an increasing proportion of the export market for industrial 
goods; the development of long-term structural problems in several sectors, 
resulting from shifts in the pattern of world consumption and production; 
the appearance of significant current account deficits after the oil price in- 
crease in 1973; greater skepticism about the functioning of the international 
trading system ; and, above all, the recession, stagnant domestic markets, and 
associated high levels of unemployment since 1974. Accordingly, individual 
nations have taken several measures — including safeguard actions (protect- 
ing domestic industry against injury from imports), antidumping proceed- 
ings, and actions to offset export subsidies. These policies have been con- 
centrated in certain industrial sectors, particularly textiles, automobiles, steel, 
and shipbuilding. 

THE MULTILATERAL TRADE NEGOTIATIONS 

The Administration, in conjunction with its major trading partners and 
numerous developing nations, is committed to resolving these trade problems 
through the Tokyo Round of the Multilateral Trade Negotiations. The goals 
of these multilateral negotiations have been to relax tariff and nontariff 
barriers to trade, to formulate rules for trade and codes of fair conduct, to 
develop effective mechanisms for settling disputes, and to allow nations to 
benefit from specialization without unduly losing control over the growth 
patterns of their own economies. 

By the end of 1978 these goals seemed close to achievement when signifi- 
cant agreement was reached on the reduction of most of the tariff and 
nontariff barriers to trade. The trade package (still subject to final agree- 
ment in early 1979 and to legislative approval later in the year) includes 
codes on subsidies, government procurement, standards, customs valuation, 
and licensing. It also includes a package of tariff cuts by the United States, 
with reciprocal cuts from our trading partners. The U.S. cuts are projected 
to average about 30 percent. In addition, negotiators agreed to remove sev- 
eral particularly burdensome industrial and agricultural nontariff barriers. 
And finally, the trade package provides measures to improve the General 

158 



Agreement on Tariffs and Trade (GATT) framework for dealing with agri- 
cultural trade issues, trade with developing countries, balance of payments 
measures, export restrictions, and the general management of trade disputes. 

Among the most significant areas of agreement for U.S. trade interests 
are the codes on safeguards, on subsidies and countervailing duties, and on 
government procurement. The safeguards code ensures that countries will 
observe international trading rules as set forth in the revised GATT Article 
XIX when they restrict imports of particular products in order to afford 
temporary relief to domestic producers from injurious foreign competition. 
This revised article provides for a broad coverage of trade policies, improved 
criteria and conditions for taking safeguard action, more openness and due 
process in domestic safeguard procedures, and better international surveil- 
lance. There is also likely to be some scope for selective action when an 
injury can be ascribed to imports from particular countries. Such selectivity 
would be subject to consultation and negotiation with the affected countries 
and to surveillance by a GATT committee of representatives from each of 
the signatories. 

The agreement on subsidies and countervailing duties will limit trade- 
distorting subsidies, and will enunciate more clearly a country's right to 
take counteractions against such practices. Export subsidies will be defined 
more broadly than they have been in the past (for example, they can exist 
even if the domestic price and export price are the same) ; they must be 
imposed and regulated with greater "transparency" (that is, so that they 
are more visible to the domestic and foreign public) ; they will be prohibited 
on primary mineral products and nonprimary products; and their use for 
agricultural products will require greater discipline. In addition, signatories 
will agree to consider the impact on their trading partners when using 
economic subsidies in general. Counter-measures can be imposed if a subsidy 
causes injury to domestic producers, the impairment of benefits from GATT 
concessions, or serious prejudice to other signatories (if, for example, it 
reduces a nation's expected benefits from international agreements). This 
particular code will be enforced through a tightly controlled process for 
settling disputes (the recommendations of the international committee must 
be reported within 120 days of a complaint) . 

The government procurement code is intended to reduce the scope for 
discrimination against foreign suppliers when governments purchase articles 
for their own use. It entails agreement on greater transparency in the bid- 
ding and awarding of government contracts for purchases of goods; and, 
since the elimination of all discrimination is unlikely, it also requires agree- 
ment about the official entities that would be covered by the code. The latter 
problem is particularly difficult since many of the entities which are private 
in the United States are governmental in many foreign countries. 
Nevertheless significant reduction of discrimination in government procure- 
ment, subject to settlement of disputes by an international panel, should 
be achieved. 

159 



Taken together, the tentative agreements reached in the Tokyo Round of 
the Multilateral Trade Negotiations represent significant progress in our 
continuing efforts to reduce barriers to international commerce and to 
strengthen and expand international trading rules, and they should con- 
tribute to an increase in trade and investment around the world. This agree- 
ment represents the first time since the 1960s that the international com- 
munity has reduced the barriers to trade across such a broad spectrum of 
tariff and nontariff measures. For the United States in particular, the lower- 
ing of our own import barriers should help reduce inflationary pressures by 
increasing the competitiveness of imports and of import-competing prod- 
ucts. At the same time, our export capabilities will receive a boost through 
the lowering of both tariff and nontariff barriers in our major export 
markets. 

U.S. DOMESTIC TRADE POLICY 

Despite increasing trade problems and pressures for protectionist trade 
policies around the world, the Administration remains committed to a free 
and open trading system. In many highly concentrated domestic industries, 
foreign competition helps prevent market power from becoming excessive. 
Nevertheless cases occur from time to time where, under U.S. law, import 
relief is necessary: where injury exists, where imports are the major cause 
of injury, and where such temporary actions can contribute to adjustment. 

In 1978 the International Trade Commission investigated petitions for 
import relief by over 30 industries, covering imports valued at over $2 billion. 
The International Trade Commission recommended increased protection in 
the form of tariffs or quantitative restrictions on more than $1.3 billion of 
trade in such goods as stainless steel flatware, high-carbon ferrochrome, 
CB radios, refined copper, industrial fasteners, and bicycle tires and tubes. 
Relief was granted in escape clause cases involving approximately $750 mil- 
lion in imports (for example, CB radios, high-carbon ferrochrome, and 
industrial fasteners). In these cases the Administration decided in favor of 
import relief because it would aid substantially in the development of more 
efficient industries, and because the direct benefits of relief were sufficiently 
high to outweigh the costs to consumers and other sectors of the economy. 

THE NATIONAL EXPORT POLICY 

Faced with the large external deficit and the need for action, the Admin- 
istration felt that increasing U.S. exports could be a valuable way to move 
toward adjustment. In the light of the weak dollar, the deteriorating posi- 
tion of U.S. manufactured exports, and the low profile accorded export 
efforts in the United States, the Administration announced the National 
Export Policy on September 26, 1978. This National Export Policy, in con- 
junction with the successful conclusion of the Multilateral Trade Negotia- 
tions, will ensure a strong export industry and an environment for fair 
competition from imports for the period ahead. 

160 



Before 1976 the largest U.S. trade deficits for a full year were the $5.3- 
billion deficit in 1974 and the $6.4-billion deficit in 1972. In comparison, the 
trade deficits in 1976, 1977, and 1978 were $9 billion, $31 billion, and an 
estimated $35 billion respectively. The U.S. share of total manufactured 
exports of 15 industrial countries fell from almost 30 percent in the late 
1950s to 19.2 percent in 1972. It rose to 21.1 percent in 1975 but has de- 
clined steadily since then, falling to 18.9 percent by the first quarter of 1978, 
the lowest since mid- 1972 (Chart 13). 

The outlook for 1979 and the early 1980s is much brighter. U.S. exports 
of manufactured goods have already shown a strong turnaround in 1978. 
This improvement, and the favorable outlook, derive from several factors. 
First, some of the trade deficit can be explained by our faster growth com- 
pared to that of our major trading partners. As their growth rates abroad 
increase in relation to ours, in accord with recent trends and commitments 
made at the Bonn Summit, our exports should increase relative to our im- 
ports. Second, the depreciation of the dollar over the last 18 months will 
provide a continuing spur to exports in the coming years. Third, by reduc- 
ing inflationary pressures, the Administration's anti-inflation program will 
improve our international competitiveness, increasing our exports and re- 
ducing our imports. Fourth, the successful conclusion of the Multilateral 



Chart 13 



U.S. Share of Fifteen Industrial 
Countries' Exports of Manufactured Goods 




1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 

VU.S. EXPORTS OF MANUFACTURES AS PERCENT OF TOTAL 
INDUSTRIAL COUNTRIES' EXPORTS OF MANUFACTURED GOODS. 
SOURCE DEPARTMENT OF COMMERCE 



161 



Trade Negotiations in Geneva will reduce tariff and nontariff barriers in our 
export markets and should improve our export capabilities. 

Finally, the Administration has committed itself to a stronger emphasis 
on foreign markets for U.S. goods by developing the National Export Policy. 
This policy includes the following major provisions: an increase in the size 
and the flexibility of the Eximbank's activities; a commitment from the 
Small Business Administration to channel up to $100 million of its loan 
guarantees to small export businesses; an earmarking of $20 million of the 
Commerce and State Departments' budgets to assist small- and medium- 
sized businesses in their marketing efforts abroad; an increase in the level 
of short-term agricultural export credits by almost $1 billion; and a de- 
cision to ask the Justice Department to clarify ambiguities about the en- 
forcement of the Foreign Corrupt Practices Act and the international appli- 
cation of our antitrust laws. 

Perhaps the most important contribution the Federal Government can 
make td improving our trade position is to assure a more sensible regulatory 
environment. Too frequently, obstacles to production or investment have 
raised domestic costs or encouraged imports. If agencies are required to take 
into account the effects on trade and other costs of regulations, greater scope 
can exist for competitive forces, thereby allowing domestic producers to gain 
a greater share of domestic and foreign markets. 



162 



Appendix A 

REPORT TO THE PRESIDENT ON THE ACTIVITIES 

OF THE 
COUNCIL OF ECONOMIC ADVISERS DURING 1978 



163 



LETTER OF TRANSMITTAL 

Council of Economic Advisers, 
Washington, D.C., December 29, 1978. 
Mr. President: 

The Council of Economic Advisers submits this report on its activities 
during the calendar year 1978 in accordance with the requirements of the 
Congress, as set forth in section 10(d) of the Employment Act of 1946 as 
amended by the Full Employment and Balanced Growth Act of 1978. 
Cordially, 

Charles L. Schultze, Chairman 
Lyle E. Gramley 
William D. Nordhaus 



165 



Report to the President on the Activities of the 
Council of Economic Advisers During 1978 

With the enactment of the Full Employment and Balanced Growth Act of 
1978, the chartering legislation of the Council of Economic Advisers was 
substantially revised for the first time since the Council was created by the 
Employment Act of 1946. The new act, which was signed by the President on 
October 27, 1978, is better known as the Humphrey-Hawkins Act, after the 
primary sponsors of the law, Senators Hubert and Muriel Humphrey and 
Congressman Augustus Hawkins. 

Under the Full Employment and Balanced Growth Act, the basic mission 
of the Council of Economic Advisers is unchanged. The Council is to con- 
tinue to advise and assist the President in the formulation of national eco- 
nomic policies and in Presidential decisions on other matters that affect the 
economic life of the Nation. However, the Humphrey-Hawkins Act creates 
an important new framework within which the government is to pursue 
policies designed to reach our economic objectives. 

The act reaffirms and enlarges upon the commitment of the Employment 
Act of 1946 by declaring that it is a national objective to provide full 
opportunities for useful employment to all Americans willing and able to 
work. The Humphrey-Hawkins Act also legislates for the first time a na- 
tional commitment to reduce the iate of inflation. The act recognizes as well 
the need for better coordination of monetary and fiscal policies, and to that 
end establishes new procedures and requirements for the President, the 
Congress, and the Federal Reserve System. 

The new law requires that the President each year set forth in the Eco- 
nomic Report of the President numerical goals for employment, unemploy- 
ment, production, real income, productivity, and prices during the next 5 
years. Short-term goals for these key indicators of the economy's health are 
to be established for 2 years, and medium-term goals for the subsequent 3 
years. 

The Full Employment and Balanced Growth Act sets forth specific 
numerical goals for unemployment and inflation for the 5-year period now 
ahead. The act states that the goal for unemployment in 1983 should be 
4 percent overall and 3 percent for workers aged 20 and over. For inflation, 
the act sets a goal of 3 percent by 1983 and, after that goal is achieved, zero 
percent by 1988. These are highly ambitious goals that cannot be realized 

167 



solely through fiscal and monetary measures. The act recognizes this in two 
ways. 

First, it recommends to the President a wide range of policies that might 
serve to attack the problems of unemployment and inflation. The act does 
not require him to pursue any specific policies, nor does it authorize spend- 
ing on any new programs. If the President wishes to adopt policies mentioned 
in the act, he must seek congressional authorization to fund the new 
programs. 

Second, the act authorizes the President, beginning with the second Eco- 
nomic Report published after passage of the act, to recommend goals for 
unemployment and inflation in 1983 that differ from those provided for in 
the act, if economic circumstances make such changes necessary. The act 
provides, however, for continued commitment by the Congress and the 
President to the objective of reducing unemployment to 4 percent as soon as 
feasible. 

If the President recommends a change in the 1983 goal for reducing 
unemployment, his Economic Report must designate the year in which he 
believes that the 4 percent goal can be achieved. The Congress may then 
include in its first concurrent budget resolution its own timetable for 
attaining the 4 percent unemployment goal. The budget resolution may also 
contain such a statement if the President should, in subsequent years, 
recommend a year for reaching 4 percent unemployment other than that 
set in a future congressional budget resolution. 

Each year the President is required by the new act to present budget 
recommendations for the 2 years immediately ahead that are consistent 
with the short-term goals set forth in his Economic Report. He is also re- 
quired to present projections for the budget in the subsequent 3 
years that are consistent with the medium-term goals set out in the 
Economic Report. Similarly, the act calls upon the Congress, in its con- 
sideration of the budget, to take into account the economic goals recom- 
mended by the President. Every year, when debate on the first concurrent 
budget resolution is begun in each House of Congress, up to 4 hours of 
debate are to be reserved for discussion of the economic situation and its 
implications for budgetary policy. 

The Federal Reserve Board is required by the act to review the President's 
budget and Economic Report and to report to the Congress regarding the 
President's recommendations and the manner in which monetary policies 
are related to his goals. The Congress, in its yearly deliberations on the 
budget, is to take into account not only the President's program but the 
views and policies of the Federal Reserve Board as well. Through this 
process, the act should promote a better coordination of the Nation's 
economic policies. 

The Council of Economic Advisers played an active role in the develop- 
ment of the Full Employment and Balanced Growth Act. During 1977 the 

168 



Council joined sponsors of the act in discussions that led to the legislation 
introduced in mid- 197 7 with the President's full support and passed by the 
Congress in 1978. During congressional consideration of the act, the Coun- 
cil worked closely with members of Congress, their staffs, and other govern- 
ment agencies to achieve passage of the legislation. 

The Economic Report of the President and the Budget of the United 
States, published in January 1979, will be the first issued under the new 
act, and the first to set forth economic goals in the fashion required by 
the new act. They will also carry out the requirement of the Humphrey- 
Hawkins Act that each year the Office of Management and Budget re- 
view selectively a number of national priority programs and policies that can 
further the purposes of the act. The act particularly directs the Office of 
Management and Budget to study such significant issues as government 
policies affecting energy and agriculture, the problems of urban areas, 
and the expansion of exports. Similarly, the act requires that the Economic 
Report of the President include a report on investment policy that discusses 
both the needs of businesses for investment capital and the government's 
policies to support adequate rates of capital formation. 

FUNCTIONS OF THE COUNCIL OF ECONOMIC ADVISERS 

The Employment Act of 1946 challenged the government to pursue poli- 
cies that would achieve maximum employment, production, and purchas- 
ing power. Recognizing the evolution of the economy since 1946, and the 
increasing importance of the inflation problem in today's economy, the Full 
Employment and Balanced Growth Act adds to that mandate. The Federal 
Government still is to promote high levels of employment and production. 
Now, however, the government is also called upon to pursue prudent 
budgetary policies, to seek an improved international trading position for the 
United States, and to take steps to assure reasonable price stability. 

These new legislative objectives are fully consistent with the Council 
of Economic Advisers' current role in the Administration, a role that 
has grown steadily since 1946 as new economic problems placed new de- 
mands on the Council and its staff. Today the Council is responsible for 
advising the President on such widely differing matters as Federal fiscal poli- 
cies, efforts to reform the Federal regulatory system, and the international 
economic policies of the U.S. Government. 

MACROECONOMIC POLICIES 

From the outset the Council's fundamental role has been to advise the 
President on comprehensive economic policies designed to achieve the gov- 
ernment's objectives for employment, output, and price stability. To fulfill 
this responsibility the Council develops economic forecasts several times 
each year with the assistance of an interagency forecasting committee. The 
members of this committee include, in addition to the Council, representa- 

169 



tives from the Office of Management and Budget and the Departments of 
the Treasury, Commerce, and Labor. This group, which is chaired by a 
Member of the Council, meets to analyze the outlook for individual sectors 
of the economy and to develop detailed economic forecasts for the period 
immediately ahead. The Chairman of the Council presents these fore- 
casts to the Economic Policy Group (EPG), made up of the President's 
principal economic advisers, which meets each week to discuss and develop 
the Administration's economic policy proposals. The Chairman of the Coun- 
cil of Economic Advisers is a member of the EPG and of its steering group. 

In the final months of each year, during the preparation of the Presi- 
dent's annual budget, the Council also presents to the Economic Policy 
Group, and later to the President, proposals for Federal fiscal policies during 
the coming fiscal year. The development of advice to the Presi- 
dent on macroeconomic policy thus remains one of the Council's major 
responsibilities. 

The Council also worked actively during 1978 with the Council on Wage 
and Price Stability to develop and apply measures to combat inflation, in- 
cluding the program that the President announced to the Nation on Octo- 
ber 24, 1978. The Council on Wage and Price Stability was chaired by the 
Chairman of the Council of Economic Advisers, Charles L. Schultze, until 
October 1978, when Alfred E. Kahn was named Advisor to the President on 
Inflation, and Chairman of the Council on Wage and Price Stability. 

MICROECONOMIC POLICIES 

In addition to its work on overall economic policies, the Council 
of Economic Advisers is increasingly involved in the analysis of micro- 
economic issues — those policy actions and economic developments that af- 
fect individual sectors of the economy, or even individual industries and 
markets. During 1978 the Council helped form the Administration's poli- 
cies regarding agriculture, energy, financial institutions, health insurance, 
welfare reform, and other major issues. The Council and its staff were 
also actively involved in developing the tax program that the President sub- 
mitted to the Congress in January 1978. 

During 1978 the Council continued to chair the interagency Regulatory 
Analysis Review Group (RARG), created late in 1977 to review selected 
analyses of the economic effects of major regulatory proposals. The President 
has ordered that each major regulatory proposal must be accompanied by a 
regulatory analysis. The analysis is to be developed by the regulatory agency 
originating the proposal and submitted for public comment before the final 
regulation takes effect. During the period for public comment the Regula- 
tory Analysis Review Group evaluates the regulatory analysis, and its ap- 
praisal is filed in the agency's record of public commentary. In 1978 five 
major regulations were reviewed by the RARG: the Occupational Safety 
and Health Administration's standard on workers' exposure to acrylonitrile, 
and its generic carcinogen policy; the Environmental Protection Agency's 

170 



ambient air quality standard for ozone; the Department of Transportation's 
regulation on access to mass transit facilities for the handicapped; and the 
Department of the Interior's surface coal mining and reclamation regula- 
tions. At year's end, reviews were under way of the Environmental Protection 
Agency's new source performance standards for steam-powered electric 
generating plants and the Department of Energy's coal conversion regula- 
tions. The Council's staff took an active part in preparing several of the 
review group's comments on these regulations and in coordinating the 
activities of the RARG. 

The Council of Economic Advisers continued during 1978 to participate 
in developing the Administration's international economic policies. The 
Chairman of the Council also served during the year as the Chairman of 
the Economic Policy Committee of the Organization for Economic Co- 
operation and Development (OECD). In that capacity he chaired three 
meetings of the committee, which consists of senior economic officials from 
OECD member governments. 

The Council also participates in the working parties of the OECD 
Economic Policy Committee on inflation, balance of payments adjustment, 
and medium-term growth, as well as the ad hoc group on positive adjust- 
ment policies. Council Members or staff economists, representing the U.S. 
Government, attend periodic meetings of these working parties during the 
year. 

PUBLIC INFORMATION 

The Full Employment and Balanced Growth Act retained the require- 
ment, originally set forth by the Employment Act of 1946, that the Presi- 
dent submit a report to the Congress each year on the state of the economy. 
As noted earlier, however, the Humphrey-Hawkins Act requires new infor- 
mation to be included in the Economic Report of the President. 

The Council assumes major responsibility for the preparation of the Eco- 
nomic Report of the President, which also contains the annual report of the 
Council. This publication is the principal channel through which the public 
is informed of the Council's work and views, and it is of further importance 
in presenting and explaining the Administration's domestic and international 
economic policies. In recent years about 50,000 copies of the Report have 
been distributed annually. 

The Council prepares a monthly publication, Economic Indicators, which 
is a compendium of statistical information developed by the Council's Statis- 
tical Office for the Joint Economic Committee of the Congress. Each month 
about 10,000 copies of Economic Indicators are distributed. 

Information is also provided to members of the public through speeches 
and other public appearances by the Chairman, Members, and staff econ- 
omists of the Council. In 1978 the Chairman and Members made 23 ap- 
pearances before committees of the Congress to testify on the Administra- 
tion's economic policies. Among its publications this year the Council in- 

171 



eluded a Staff Paper on the taxation of capital gains, prepared by John 
Yinger, a senior staff economist, with the help of other members of the Coun- 
cil's staff. Less formally, the Council answered numerous requests from the 
press in 1978 and provided information on a wide range of economic topics 
in response to inquiries from individual citizens. 

ORGANIZATION AND STAFF OF THE COUNCIL 
OFFICE OF THE CHAIRMAN 

Charles L. Schultze, appointed Chairman of the Council in 1977, com- 
municates the Council's views to the President through direct consultation 
as well as through written reports dealing with particular economic develop- 
ments, programs, and proposals. The Chairman represents the Council at 
meetings of the Cabinet and other official events. 

COUNCIL MEMBERS 

The two Council Members supervise the work of the Council's profes- 
sional staff. Members also represent the Council at meetings of public and 
private groups concerned with economic affairs, and they assume major 
responsibility for the Council's involvement in the activities of the govern- 
ment that affect the economy. Lyle E. Gramley and William D. Nordhaus 
continued to serve as Council Members during 1978. 



Past Council Members and their dates of service are listed below 



Name 



Position 



Oath of office date 



Separation date 



Edwin G. Nourse 

Leon H. Keyserling 

John D.Clark 

Roy Blough 

Robert C. Turner 

Arthur F. Burns 

NeilH. Jacoby 

Walter W. Stewart..-.. 
Raymond J. Saulnier... 

Josephs. Davis 

Paul W. McCracken... 

Karl Brandt 

Henry C. Wallich 

Walter W. Heller 

James Tobin 

Kermit Gordon 

Gardner Ackley 

John P.Lewis 

Otto Eckstein 

Arthur M. Okun 

James S. Duesenberry. 

Merton J. Peck 

Warren L Smith 

Paul W. McCracken... 
Hendrik S. Houthakker 
Herbert Stein 

Ezra Solomon 

Marina v.N. Whitman.. 

Gary L. Seevers 

William J. Fellner 

Alan Greenspan 

Paul W. MacAvoy 

Burton G. Malkiel 



Chairman 

Vice Chairman.. 
Acting Chairman 

Chairman 

Member 

Vice Chairman.. 

Member 

Member 

Chairman 

Member 

Member 

Member 

Chairman 

Member 

Member 

Member 

Member 

Chairman 

Member 

Member 

Member 

Chairman 

Member 

Member 

Member. 

Chairman 

Member 

Member 

Member 

Chairman 

Member 

Member 

Chairman 

Member 

Member 

Member 

Member 

Chairman 

Member 

Member 



August 9, 1946 

August 9, 1946 

November 2, 1949.. 

May 10, 1950 

August 9, 1946 

May 10. 1950 

June 29 1950. 

September 8, 1952. 

March 19, 1953 

September 15, 1953 
December 2, 1953.. 

April 4 1955 

December 3, 1956.. 

May 2, 1955 

December 3, 1956.. 
November 1, 1958.. 

May 7, 1959 

January 29, 1961... 
January 29, 1961... 
January 29, 1961... 

August 3, 1962 

November 16, 1964. 

May 17, 1963 

September 2, 1964.. 
November 16, 1964. 
February 15, 1963.. 
February 2, 1966... 
February 15, 1968.. 

July 1,1968 

February 4, 1969... 
February 4, 1969... 
February 4, 1969... 

January 1, 1972 

September 9, 1971.. 

March 13, 1972 

July 23, 1973 

October 31, 1973... 
September 4. 1974.. 

June 13, 1975 

July 22, 1975 



November 1, 1949. 



January 20, 1953. 

February 11, 1953. 
August 20. 1952. 
January 20, 1953. 
December 1, 1956. 
February 9, 1955. 
April 29, 1955. 

January 20, 1961. 
October 31, 1958. 
January 31, 1959. 
January 20, 1961. 
January 20, 1961. 
November 15, 1964. 
July 31. 1962. 
December 27, 1962. 

February 15, 1968. 
August 31. 1964. 
February 1, 1966. 

January 20, 1969 
June 30, 1968. 
January 20, 1969. 
January 20, 1969. 
December 31, 1971. 
July 15, 1971. 

August 31, 1974. 
March 26. 1973. 
August 15, 1973. 
April 15, 1975. 
February 25, 1975. 
January 20, 1977. 
November 15, 1976. 
January 20, 1977. 



172 



The Council staff is small enough to permit the Chairman and Members 
to work together as a team on most major policy issues. To facilitate coordi- 
nation of the staffs work, however, responsibility for the major economic 
topics of concern to the Council has been informally divided between the 
two Members. Mr. Gramley has continued to take primary responsibility in 
1978 for macroeconomic analysis, including the preparation of economic 
forecasts, and for labor market policies. Mr. Nordhaus has supervised inter- 
national economic analysis and microeconomic analysis, including analysis of 
policies in such areas as energy, agriculture, social welfare, and oversight of 
regulatory reform activities. 

PROFESSIONAL STAFF 

At the end of 1978 the professional staff consisted of the Special As- 
sistant to the Chairman, 10 senior staff economists, 2 staff economists, 1 
statistician, and 5 junior staff economists. 

The professional staff and their special fields at the end of the year were: 
Peter G. Gould Special Assistant to the Chairman 

Senior Staff Economists 

Thomas C. Earley Agriculture and Food Policy 

Robert J. Flanagan Labor Market and Anti- Inflation Policies 

Steven W. Kohlhagen International Financial Developments and 

Trade 

Val L. Koromzay International Financial and Economic De- 
velopments, and Trade 

Susan J. Lepper Monetary and Financial Policies, Housing, 

State and Local Finance, and General 
Macroeconomic Analysis 

David C. Munro Business Conditions Analysis and Forecasting 

David S. Sibley Regulation 

Lawrence J. White Regulation 

David A. Wyss Business Conditions Analysis and Forecasting, 

and Health Policy 

John M. Yinger Public Finance and Income Maintenance 

Policy 

Statistician 
Catherine H. Furlong Senior Statistician 

Staff Economists 

Robert E. Litan Regulation and Energy 

Michael J. McKee Business Conditions Analysis and Forecasting 

173 



Junior Economists 

James P. Luckett Labor Market Policies 

Robert S. Lurie Regulation and Energy 

Frederick W. McKinney. . . Public Finance, Income Maintenance, and 

Health Policy 

Elizabeth A. Savoca Business Conditions Analysis and Forecasting 

Wanda S. Tseng International Economic Developments and 

Trade 

Catherine H. Furlong, Senior Statistician, is in charge of the Council's 
Statistical Office. Mrs. Furlong has primary responsibility for managing the 
Council's statistical information system. She supervises the publication of 
Economic Indicators and the preparation of the statistical appendix to the 
Economic Report. She also oversees the verification of statistics in memo- 
randa, testimony, and speeches. Natalie V. Rentfro, Earnestine Reid, and 
Elizabeth A. Kaminski assist Mrs. Furlong. 

From time to time during the year, the Council calls upon outside econo- 
mists to provide special assistance on projects relating to their particular 
specialty. During 1978 consultants to the Council included Peter K. Clark 
(Stanford University), Donald H. Fullerton (Stanford University), Frank 
S. Levy (The Urban Institute), and John B. Shoven (Stanford University). 

During the summer James R. Golden (U. S. Military Academy) was a 
member of the professional staff. 

In preparing the Economic Report the Council relied upon the editorial 
assistance of Rosannah C. Steinhoff . Also called on for special assistance in 
connection with the Report were Dorothy L. Reid and Dorothy Bagovich, 
former members of the Council staff. 

SUPPORTING STAFF 

The Administrative Office of the Council of Economic Advisers provides 
general support for the Council's activities. Nancy F. Skidmore, Adminis- 
trative Officer, prepares and analyzes the Council budget and provides gen- 
eral administrative services. 

Elizabeth A. Kaminski, Staff Assistant to the Council, handles general 
personnel management, serves as Executive Secretary to the Regulatory 
Analysis Review Group, and provides general assistance to the Council and 
to the Special Assistant in the management of the Council's activities. 

Members of the secretarial staff for the Chairman and Council Members 
during 1978 were Patricia A. Lee, Linda A. Reilly, Florence T. Torrison, 
and Alice H. Williams. Secretaries for the professional staff were M. Cather- 
ine Fibich, Bessie M. Lafakis, Joyce A. Pilkerton, Bettye T. Siegel, Margaret 
L. Snyder, and Lillie M. Sturniolo. 

Marie G. Boccucci provided secretarial assistance during the summer 
months. 

174 



DEPARTURES 

The Council's professional staff members most often are on leave to the 
Council from universities, other government agencies, or research institutions. 
Their tenure with the Council is usually limited to 1 or 2 years. Senior staff 
economists who completed their appointments with the Council during the 
year were Roger E. Brinner (Data Resources, Inc.), Peter K. Clark (Stan- 
ford University) , Nina W. Cornell (Federal Communications Commission), 
George E. Johnson (University of Michigan), J. B. Penn (Department of 
Agriculture), Jeffrey R. Shafer (Federal Reserve Board), and William L. 
Springer (Data Resources, Inc.). Arthur E. Blakemore, staff economist, 
resigned to accept a position with the Council on Wage and Price Stability. 

Junior economists who resigned in 1978 were Michael S. Golden (Con- 
gressional Budget Office) , Howard K. Gruenspecht (Domestic Policy Staff) , 
Richard I. Kolsky (Yale University), Richard A. Koss (Wharton Econo- 
metric Forecasting Associates, Inc.), Julianne M. Malveaux (Rockefeller 
Foundation), and Martha M. Parry (Stanford University) . 

James W. Gatling and Frank C. Norman joined the new Office of Admin- 
istration created in the Executive Office of the President as part of the 
President's 1977 reorganization of his own staff offices. 



175 



Appendix B 

STATISTICAL TABLES RELATING TO INCOME, 
EMPLOYMENT, AND PRODUCTION 



177 



CONTENTS 



NATIONAL INCOME OR EXPENDITURE: Page 

B-l . Gross national product, 1929-78 1 83 

B-2. Gross national product in 1972 dollars, 1929-78 184 

B-3. Implicit price deflators for gross national product, 1 929-78 1 86 

B-4. Implicit price deflators and alternative price measures for gross 

national product and gross domestic product, 1 929-78 1 88 

B-5. Gross national product by industry in 1972 dollars, 1947-77 189 

B-6. Gross national product by major type of product, 1929-78 190 

B-7. Gross national product by major type of product in 1972 dollars, 

1929-78 191 

B-8. Gross national product: Receipts and expenditures by major eco- 
nomic groups, 1929-78 192 

B-9. Gross national product by sector, 1929-78 194 

B-10. Gross national product by sector in 1972 dollars, 1929-78 195 

B-l 1. Gross domestic product of nonfinancial corporate business, 1929-78. . 196 

B-12. Output, costs, and profits of nonfinancial corporate business, 1948-78. 197 

B-13. Personal consumption expenditures, 1929-78 198 

B-14. Gross private domestic investment, 1929-78 199 

B-l 5. Inventories and final sales of business, 1946-78 200 

B-16. Inventories and final sales of business in 1972 dollars, 1947-78 201 

B-l 7. Relation of gross national product and national income, 1929-78. . . . 202 

B-l 8. Relation of national income and personal income, 1929-78 203 

B-19. National income by type of income, 1929-78 204 

B-20. Sources of personal income, 1929-78 206 

B-21. Disposition of personal income, 1929-78 208 

B-22. Total and per capita disposable personal income and personal con- 
sumption expenditures in current and 1972 dollars, 1929-78 209 

B-23. Gross saving and investment, 1929-78 210 

B-24. Saving by individuals, 1946-78 211 

B-25. Money income (in 1977 dollars) and poverty status of families and 

unrelated individuals by race of head, 1947-77 212 

POPULATION, EMPLOYMENT, WAGES, AND PRODUCTIVITY: 

B-26. Population by age groups, 1929-78 213 

B-27. Noninstitutional population and the labor force, 1929-78 214 

B-28. Civilian employment and unemployment by sex and age, 1947-78. . 216 

B-29. Selected employment and unemployment data, 1948-78 217 

B-30. Unemployment rate by demographic characteristic, 1948-78 218 

B-31. Unemployment by duration, 1947-78 219 

B-32. Unemployment by reason, 1967-78 220 

B-33. Unemployment insurance programs, selected data, 1946-78 221 

B-34. Wage and salary workers in nonagricultural establishments, 1929-78. 222 
B-35. Average weekly hours and hourly earnings in selected private non- 
agricultural industries, 1947-78 224 

B-36. Average weekly earnings in selected private nonagricultural indus- 
tries, 1947-78 225 

B-37. Productivity and related data, private business economy, 1947-78. . . 226 
B-38. Changes in productivity and related data, private business economy, 

1948-78 227 

179 



PRODUCTION AND BUSINESS ACTIVITY: Page 

B-39. Industrial production indexes, major industry divisions, 1929-78. . . . 228 

B-40. Industrial production indexes, market groupings, 1947-78 229 

B-41. Industrial production indexes, selected manufactures, 1947-78 230 

B-42. Capacity utilization rate in manufacturing, 1948-78 231 

B-*3. New construction activity, 1929-78 232 

B-44. New housing units started and authorized, 1959-78 234 

B-45. Business expenditures for new plant and equipment, 1947-79 235 

B-46. Sales and inventories in manufacturing and trade, 1947-78 236 

B-47. Manufacturers' shipments and inventories, 1947-78 237 

B-48. Manufacturers' new and unfilled orders, 1947-78 238 

PRICES: 

B— 4-9. Consumer price indexes by expenditure classes, 1929-78 239 

B-50. Consumer price indexes by commodity and service groups, 1939-78. 240 

B-51. Consumer price indexes, selected commodities and services, 1939-78. 241 
B-52. Consumer price indexes for commodity groups, seasonally adjusted, 

1975-78 242 

B-53. Consumer price indexes for service groups and selected expenditure 

classes, seasonally adjusted, 1975-78 243 

B-54. Changes in consumer price indexes, major groups, 1 948-78 244 

B-55. Producer price indexes by stage of processing, 1 947-78 245 

B-56. Producer price indexes by stage of processing, seasonally adjusted, 

1975-78 247 

B-57. Producer price indexes by major commodity groups, 1929-78 248 

B-58. Changes in producer price indexes for finished goods, 1948-78 250 

MONEY STOCK, CREDIT, AND FINANCE: 

B-59. Money stock measures, 1953-78 251 

B-60. Commercial bank loans and investments, 1 930-78 252 

B-61. Liquid asset holdings of private domestic nonfinancial investors, 

1952-78 253 

B-62. Total funds raised in credit markets by nonfinancial sectors, 1970-78. 254 

B-63. Federal Reserve Bank credit and member bank reserves, 1929-78. . . 256 

B-64. Aggregate reserves and deposits of member banks, 1959-78 257 

B-65. Bond yields and interest rates, 1929-78 258 

B-66. Consumer installment credit, 1970-78 260 

B-67. Mortgage debt outstanding by type of property and of financing, 

1939-78 261 

B-68. Mortgage debt outstanding by holder, 1939-78 262 

GOVERNMENT FINANCE: 

B-69. Federal budget receipts and outlays, fiscal years 1929-80 263 

B-70. Federal budget receipts, outlays, and debt, fiscal years 1 970-80 264 

B--71. Relation of Federal Government receipts and expenditures in the 

national income and product accounts to the unified budget, 

1978-80 266 

B-72. Government receipts and expenditures, national income and product 

accounts, 1929-78 267 

B-73. Federal Government receipts and expenditures, national income and 

product accounts, 1952-80 '• • • 268 

B-74. State and local government receipts and expenditures, national income 

and product accounts, 1946-78 269 

B-75. State and local government revenues and expenditures, selected fiscal 

years, 1927-77 270 

B-76. Interest-bearing public debt securities by kind of obligation, 1967-78. 271 

180 



GOVERNMENT FINANCE— Continued Page 

B-77. Estimated ownership of public debt securities, 1967-78 272 

B-78. Average length and maturity distribution of marketable interest- 
bearing public debt securities held by private investors, 1967-78. . 273 

CORPORATE PROFITS AND FINANCE: 

B-79. Corporate profits by industry, 1929-78 274 

B-80. Corporate profits of manufacturing industries, 1929-78 276 

B-81. Corporate profits with inventory valuation and capital consumption 

adjustments, 1946-78 278 

B-82. Sales, profits, and stockholders' equity, all manufacturing corpora- 
tions, 1947-78 279 

B-83. Relation of profits after taxes to stockholders' equity and to sales, all 

manufacturing corporations, 1947-78 280 

B-84. Relation of profits after taxes to stockholders' equity and to sales, all 

manufacturing corporations, by industry group, 1977-78 281 

B-85. Sources and uses of funds, nonfarm nonfinancial corporate business, 

1946-78 282 

B-86. Current assets and liabilities of U.S. corporations, 1939-78 283 

B-87. State and municipal and corporate securities offered, 1934-78 284 

B-88. Common stock prices and yields, 1949-78 285 

B-89. Business formation and business failures, 1929-78 286 

AGRICULTURE: 

B-90. Income of farm people and farmers, 1929-78 287 

B-91 . Farm production indexes, 1929-78 288 

B-92. Farm population, employment, and productivity, 1929-78 289 

B-93. Indexes of prices received and prices paid by farmers and selected farm 

resource prices, 1929-78 290 

B-94. Selected measures of farm resources and inputs, 1929-78 291 

B-95. Balance sheet of the farming sector, 1929-79 292 

INTERNATIONAL STATISTICS: 

B-96. Exchange rates, 1971-78 293 

B-97. U.S. international transactions, 1946-78 294 

B-98. U.S. merchandise exports and imports by principal end-use categories, 

1965-78 296 

B-99. U.S. merchandise exports and imports by area, 1972-78 297 

B-100. International investment position of the United States at year-end, 

1970-77 298 

B-101. International reserves, 1952, 1962, and 1974-78 299 

B-102. Summary of major U.S. Government net foreign assistance, July 1, 

1945 to December 31, 1977 300 

B-103. World trade: Exports and imports, 1965, 1970, and 1974-78 302 

B-104. World trade balance and current account balances, 1965, 1970, 

and 1974-78 303 

B-105. Consumer prices and hourly compensation, major industrial coun- 
tries, 1960-78 304 

B-106. Industrial production and unemployment rate, major industrial 

countries, 1960-78 305 

B-107. Growth rates in real gross national product, 1960-78 306 



181 



General Notes 

Detail in these tables may not add to totals because of rounding. 
Unless otherwise noted, all dollar figures are in current dollars. 

Symbols used: 

» Preliminary. 

__ Not available (also, not applicable). 



182 



NATIONAL INCOME OR EXPENDITURE 



Table B-l. — Gross national product, 1929-78 
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates] 



Gross 
national 
product 



103.4 

55.8 

90.8 

100.0 
124.9 
158.3 
192.0 
210.5 
212.3 
209.6 
232.8 
259.1 
258.0 

286.2 
330.2 
347.2 
366.1 
366.3 
399.3 
420.7 
442.8 
448.9 
486.5 

506.0 
523.3 
563.8 
594.7 
635.7 
688.1 
753.0 
796.3 
868.5 
935.5 

982.4 
1, 063. 4 
1,171.1 
1,306.6 
1,412.9 
1, 528. 8 
1, 700. 1 
1, 887. 2 
2,106.6 

1,649.7 
1,685.4 
1,715.6 
1,749.8 

1,806.8 
1,867.0 
1,916.8 
1, 958. 1 



I 1,992.0 

2, 087. 5 
2, 136. 1 
2,210.8 



Per- 
sonal 
con- 
sump- 
tion 
ex- 
pend- 
i tures 



77.3 
45.8 
67.0 

71.0 

80.8 
88.6 
99.4 
108.2 
119.5 
143.8 
161.7 
174.7 
178.1 

192.0 
207.1 
217.1 
229.7 
235.8 
253.7 
266.0 
280.4 
289.5 
310.8 

324.9 
335.0 
355.2 
374.6 
400.4 
430.2 
464.8 
490.4 
535.9 
579.7 

618.8 

668.2 

733.0 

809.9 

889.6 

979.1 

1, 090. 2 

1, 206. 5 

1, 339. 7 

1, 053. 8 
1,075.1 
1, 098. 4 
1,133.7 

1,167.7 
1,188.6 
1,214.5 
1,255.2 

1, 276. 7 
1,322.9 
1,356.9 
1, 402. 2 



Gross 
private 

do- 
mestic 
invest- 
ment 



16.2 

1.4 

9.3 

13.1 

17.9 

9.9 

5.8 

7.2 

10.6' 

30.7 

34.0 

45.9 

35.3 

53.8 
59.2 
52.1 
53.3 
52.7 
68.4 
71.0 
69.2 
61.9 
77.6 

76.4 
74.3 
85.2 
90.2 
96.6 
112.0 
124.5 
120.8 
131.5 
146.2 

140.8 
160.0 
188.3 
220.0 
214.6 
190.9 
243.0 
297.8 
344.5 

231.5 
243.5 
249.9 
247.1 

272.5 
295.6 
309.7 
313.5 

322.7 
345.4 
350.1 
359.9 



Net exports of goods 
and services 



Government purchases of goods and 
services 



Net 
exports 



1.1 



1.1 

1.7 

1.3 

.0 

-2.0 

-1.8 

-.6 

7.6 

11.6 

6.5 

6.2 

1.9 
3.8 
2.4 

.6 
2.0 
2.2 
4.3 
6.1 
2.5 

.6 

4.4 
5.8 
5.4 
6.3 
8.9 
7.6 
5.1 
4.9 
2.3 
1.8 

3.9 

1.6 

-3.3 

7.1 

6.0 

20.4 

7.4 

-11.1 

-11.8 

10.4 
9.7 
6.9 
2.8 

-8.5 
-5.9 
-7.0 
-23.2 

-24.1 

-5.5 
-10.7 
-6.9 



Ex- 
ports 



7.0 

2.4 

4.4 

5.4 
5.9 
4.8 
4.4 
5.3 
7.2 
14.8 
19.8 
16.9 
15.9 

13.9 
18.9 
18.2 
17.1 
18.0 
20.0 
23.9 
26.7 
23.3 
23.7 

27.6 
28.9 
30.6 
32.7 
37.4 
39.5 
42.8 
45.6 
49.9 
54.7 

62.5 
65.6 
72.7 
101.6 
137.9 
147.3 
163.2 
175.5 
205.2 

154.4 
160.7 
168.2 
169.4 

170.9 
178.1 
180.8 
172.1 

181.7 
205.4 
210.1 
223.5 



Im- 
ports 



5.9 

2.0 

3.4 

3.6 
4.6 
4.8 
6.5 
7.1 
7.8 
7.2 
8.2 
10.4 
9.6 

12.0 
15.1 
15.8 
16.6 
16.0 
17.8 
19.6 
20.7 
20.8 
23.2 

23.2 
23.1 
25.2 
26.4 
28.4 
32.0 
37.7 
40.6 
47.7 
52.9 



58.5 

64.0 

75.9 

94.4 

131.9 

126.9 

155.7 

186.6 

217.0 



144.1 
150.9 
161.3 
166.6 



205.8 
210.9 
220.8 

230.4 



Total 



8.8 

8.2 

13.5 

14.2 
24.9 
59.8 
88.9 
97.0 
82.8 
27.5 
25.5 
32.0 
38.4 

38.5 
60.1 
75.6 
82.5 
75.8 
75.0 
79.4 
87.1 
95.0 
97.6 

100.3 
108.2 
118.0 
123.7 
129.8 
138.4 
158.7 
180.2 
198.7 
207.9 

218.9 
233.7 
253.1 
5 

7 
4 
5 

2 



354.0 
357.2 
360.4 
366.3 



179.4 375.0 

184. 388. 8 

187. 8 399. 5 

195.2 412.5 



416.7 
424.7 
439.8 
455.6 



Federal 



Total 



1.4 

2.1 

5.2 

6.1 
16.9 
52.0 
81.3 
89.4 
74.6 
17.6 
12.7 
16.7 
20.4 

18.7 
38.3 
52.4 
57.5 
47.9 
44.5 
45.9 
50.0 
53.9 
53.9 

53.7 

57.4 
63.7 
64.6 
65.2 
67.3 
78.8 
90.9 
98.0 
97.5 

95.6 
96.2 
102.1 
102.2 
111.1 
123.1 
129.9 
145.1 
154.0 

127.1 

127.8 
129.9 
134.6 

138.3 
142.9 
146.8 
152.2 

151.5 

147.2 
154.0 
163.4 



Na- 
tional 

de- 
fense' 



1.2 

2.2 
13.7 
49.4 
79.7 
87.4 
73.5 
14.8 

9.0 
10.7 
13.2 

14.0 
33.5 
45.8 
48.6 
41.1 
38.4 
40.2 
44.0 
45.6 
45.6 

44.5 
47.0 
51.1 
50.3 
49.0 
49.4 
60.3 
71.5 
76.9 
76.3 

73.5 
70.2 
73.5 
73.5 
77.0 
83.7 
86.8 
94.3 
99.5 

85.9 
85.6 
86.5 
89.1 

91.9 
93.7 
94.4 
97.1 

97.9 
98.6 
99.6 
102.1 



Non- 
defense 



3.9 

3.9 
3.2 
2.6 
1.6 
2.0 
1.1 
2.8 
3.7 
6.0 
7.2 

4.7 
4.8 
6.5 
8.9 
6.8 
6.0 
5.7 
5.9 
8.3 
8.3 

9.3 
10.4 
12.7 
14.3 
16.2 
17.8 
18.5 
19.5 
21.2 
21.2 

22.1 

26.0 
28.6 
28.7 
34.1 
39.4 
43.1 
50.8 
54.5 

41.2 
42.2 
43.4 
45.5 

46.4 
49.3 
52.4 
55.1 

53.6 
48.6 
54.5 
61.3 



State 
and 
local 



7.4 

6.1 

8.3 

8.1 

8.0 

7.8 

7.5 

7.6 

8.2 

9.9 

12.8 

15.3 

18.0 

19.8 
21.8 
23.2 
25.0 
27.8 
30.6 
33.5 
37.1 
41.1 
43.7 

46.5 
50.8 
54.3 
59.0 
64.6 
71.1 
79.8 
89.3 
100.7 
110.4 

123.2 
137.5 
151.0 
167.3 
191.5 
215.4 
229.6 
248.9 
280.2 

226.9 
229.4 
2?0. 5 
231.7 

236.7 
245.9 
252.7 
260.3 

265.2 
277.6 
285.8 
292.2 



1 This category corresponds closely to the national defense classification in "The Budget of the United States Govern- 
ment, Fiscal Year 1980." 
' Changes are based on unrounded data and therefore may differ slightly from those obtained from data shown here. 
Source: Department of Commerce, Bureau of Economic Analysis. 

183 



Table B-2. — Gross national product in 1972 dollars, 1929-78 
[Billions of 1972 dollars, except as noted; quarterly data at seasonally adjusted annual rates| 





Gross 
national 
product 


Personal consumption expenditures 


Gross private domestic investment 




Total 


Durable 
goods 


Non- 
durable 
goods 


Services 


Total 


Fixed investment 


Year or quarter 


Total 


Nonresidential 




Total 


Struc- 
tures 


Pro- 
ducers' 
durable 
equip- 
ment 


1929 


314.6 

222.1 

318.8 

343.3 
398.5 
460.3 
530.6 
568.6 
560.0 
476.9 
468.3 
487.7 
490.7 

533.5 
576.5 
598.5 
621.8 
613.7 
654.8 
668.8 
680.9 
679.5 
720.4 

736.8 
755.3 
799.1 
830.7 
874.4 
925.9 
981.0 

1. 007. 7 

1. 051. 8 
1. 078. 8 

1, 075. 3 
1. 107. 5 
1,171.1 
1,235.0 
1,217.8 
1, 202. 3 
1,271.0 
1, 332. 7 
1, 385. 1 

1, 255. 5 
1, 268. 
1, 276. 5 
1,284.0 

1,306.7 
1, 325. 5 
1,343.9 
1, 354. 5 

1, 354. 2 
1,382.6 
1,391.4 
1,412.2 


215.6 

170.7 

220.3 

230.4 
244.1 
241.7 
248.7 
255.7 
271.4 
301.4 
306.2 
312.8 
320.0 

338.1 
342.3 
350.9 
364.2 
370.9 
395.1 
406.3 
414.7 
419.0 
441.5 

453.0 
462.2 
482.9 
501.4 
528.7 
558.1 
586.1 
603.2 
633.4 
655.4 

668.9 
691.9 
733.0 
767.7 
760.7 
774.6 
819.4 
857.7 
891.2 

806.3 
814.0 
820.9 
836.2 

846.6 
849.5 
858.0 
876.6 

873.5 
886.3 
895.1 
910.0 


21.5 

10.9 

19.1 

21.8 
24.7 
16.3 
14.5 
13.5 
14.8 
25.8 
30.6 
33.1 
36.3 

43.4 
39.9 
38.9 
43.1 
43.5 
52.2 
49.8 
49.7 
46.4 
51.8 

52.5 
50.3 
55.7 
60.7 
65.7 
73.4 
79.0 
79.7 
88.2 
91.9 

88.9 
98.1 
111.2 
121.8 
112.5 
112.7 
125.9 
137.8 
144.7 

124.8 
125.2 
125.3 
128.5 

134.9 
136.2 
136.9 
143.0 

137.8 
145.8 
144.8 
150.2 


98.1 

82.9 

115.1 

119.9 
127.6 
129.9 
134.0 
139.4 
150.3 
158.9 
154.8 
155.0 
157.4 

161.8 
165.3 
171.2 
175.7 
177.0 
185.4 
191.6 
194.9 
196.8 
205.0 

208.2 
211.9 
218.5 
223.0 
233.3 
244.0 
255.5 
259.5 
270.2 
276.4 

282.7 
287.5 
299.3 
309.3 
303.9 
306.6 
320.2 
330.4 
339.1 

314.6 
318.2 
320.5 
327.7 

327.1 
327.2 
329.2 
338.1 

333.3 
336.3 
340.4 
346.6 


96.1 

76.8 

86.1 

88.7 
91.8 
95.5 
100.1 
102.7 
106.3 
116.7 
120.8 
124.6 
126.4 

132.8 
137.1 
140.8 
145.5 
150.4 
157.5 
164.9 
170.2 
175.8 
184.7 

192.3 
200.0 
208.7 
217.6 
229.7 
240.7 
251.6 
264.0 
275.0 
287.2 

297.3 
306.3 
322.4 
336.5 
344.3 
355.3 
373.2 
389.5 
407.4 

366.9 
370.6 
375.1 
380.0 

384.6 
386.0 
391.8 
395.6 

402.4 
404.2 
410.0 
413.2 


55.9 

8.4 

33.6 

44.6 
55.8 
29.6 
18.1 
19.8 
27.8 
71.0 
70.1 
82.3 
65.6 

93.7 
94.1 
83.2 
85.6 
83.4 
104.1 
102.9 
97.2 
87.7 
107.4 

105.4 
103.6 
117.4 
124.5 
132.1 
150.1 
161.3 
152.7 
159.5 
168.0 

154.7 
166.8 
188.3 
207.2 
183.6 
142.6 
173.4 
196.3 
210.1 

168.5 
174.7 
177.1 
173.4 

186.1 
197.1 
201.7 
200.3 

205.7 
213.1 
210.4 
211.1 


51.3 

13.3 

32.0 

38.4 
43.8 
24.4 
18.0 
22.1 
31.4 
58.8 
70.4 
76.8 
70.0 

83.2 
80.4 
78.9 
84.1 
85.6 
96.3 
97.1 
95.7 
89.6 
101.0 

101.0 
100.7 
109.3 
116.8 
124.8 
138.8 
144.6 
140.7 
150.8 
157.5 

150.4 
160.2 
178.8 
190.7 
175.6 
152.4 
166.8 
187.4 
199.6 

161.0 
164.6 
167.8 
173.6 

180.3 
187.1 
189.5 
192.8 

193.4 
200.4 
201.4 
203.4 


37.0 

10.4 

20.7 

25.7 
30.3 
17.6 
14.0 
18.7 
27.6 
42.0 
48.9 
51.0 
46.0 

50.0 
52.9 
52.1 
56.3 
55.4 
61.2 
65.2 
66.0 
58.9 
62.9 

66.0 
65.6 
70.9 
73.5 
81.0 
95.6 
106.1 
103.5 
108.0 
114.3 

110.0 
108.0 
116.8 
131.0 
130.6 
113.6 
118.9 
129.8 
139.9 

115.5 
117.8 
121.0 
121.4 

126.8 
129.1 
130.8 
132.5 

133.8 
140.5 
141.7 
143.5 


20.6 

4.9 

8.6 

9.9 
11.9 
6.7 
4.2 
5.5 
8.3 
18.8 
17.3 
18.4 
17.8 

19.1 
20.6 
20.6 
22.5 
23.5 
25.3 
28.1 
28.1 
26.4 
26.8 

28.8 
29.3 
30.8 
30.8 
33.3 
39.6 
42.5 
41.1 
42.0 
44.0 

42.8 
41.7 
42.5 
45.5 
42.5 
37.1 
38.3 
40.0 
44.3 

38.3 
38.5 
38.3 
38.3 

38.3 

40.0 
40.8 
41.0 

41.0 
44.6 
45.6 
46.2 


16.4 


1933 


5.S 


1939 


12.1 


1940 


15.8 


1941 


18.5 


1942.... 


10.9 


1943 


9.8 


1944 


13.2 


1945 


19.2 


1946 


23.2 


1947 


31.6 


1948 


32.7 


1949 


28.2 


1950 


30.9 


1951 


32.3 


1952 


31. 5 


1953 


33.8 


1954 


31.8 


1955 


35.9 


1956... 


37.1 


1957 


37.9 


1958.. 


32.5 


1959 


36.1 


1960 


37.2 


1961 


36.3 


1962 


40.1 


1963 


42.7 


1964 


47.7 


1965 


56.0 


1966... 


63.6 


1967 


62.4 


1968 


66.1 


1969... 


70.3 


1970 


67.2 


1971 


66.3 


1972 


74.3 


1973 


85.5 


1974 


88.1 


1975... 


76.5 


1976 


80.6 


1977 


89.8 


1978» 


95.5 


1976:1 


77.2 


II 


79.3 


Ill 


82.7 


IV 


83.1 


1977:1 


88.5 


II 


89.0 


Ill 


90.0 


IV 


91.5 


1978:1 


92.9 


II 


95.9 


Ill 


96.1 


IV» 


97.4 







See next page for continuation of table. 



184 



Table B-2. — Gross national product in 1972 dollars, 1929- 78— Continued 

[Billions of 1972 dollars, except as noted; quarterly data at seasonally adjusted annual rates) 





Gross private domestic 
investment— continued 


Net exports of goods 
and services 


Government purchases 
of goods and services 






Fixed investment— continued 


Change 
in 
busi- 
ness 
inven- 
tories 


Net 
ex- 
ports 


Ex- 
ports 


Im- 
ports 


Total 


Fed- 
eral 


State 
and 
local 


Percent 
change 

from 

pre- 
ceding 
period, 
gross 
national 
product > 


Year or 
quarter 


Residential 


Total 


Non- 
farm 
struc- 
tures 


Farm 
struc- 
tures 


Pro- 
duc- 
ers' 
dur- 
able 
equip- 
ment 


1929 


14.3 

2.9 

11.3 

1 12.8 

13.5 

6.8 

4.0 

3.4 

3.8 

16.8 

21.5 

25.8 

24.0 

33.2 
27.5 
26.8 
27.8 
30.2 
35.1 
31.9 
29.7 
30.6 
38.1 

35.0 
35.1 
38.4 
43.2 
43.8 
43.2 
38.5 
37.2 
42.8 
43.2 

40.4 
52.2 
62.0 
59.7 
45.0 
38.8 
47.8 
57.7 
59.7 

45.5 
46.8 
46.8 
52.3 

53.5 
58.0 
58.8 
60.3 

59.5 
59.9 
59.7 
59.8 


13.6 

2.6 

10.6 

11.8 
12.5 
6.1 
3.5 
3.0 
3.5 
15.5 
19.8 
23.9 
22.3 

31.5 
25.9 
25.3 
26.3 
28.8 
33.8 
30.4 
28.3 
29.2 
36.5 

33.7 
33.6 
36.9 
41.7 
42.2 
41.6 
36.9 
35.5 
41.1 
41.5 

38.9 
50.5 
60.3 
57.9 
43.0 
37.2 
46.0 
55.6 
57.6 

43.5 
45.2 
45.2 
50.2 

51.4 
55.9 
56.6 
58.4 

57.4 
57.8 
57.6 
57.8 


0.6 

.2 

.6 

.8 

.9 

.6 

.4 

.4 

.3 

1.1 

1.3 

1.5 

1.4 

1.3 
1.3 
1.2 
1.2 
1.1 

.9 
1.0 
1.0 

.9 
1.0 

.8 
1.0 
.9 
.9 
.9 
.8 
.9 
.9 
.8 
.9 

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

1.0 
.6 
.6 
.9 

1.0 
1.0 
1.0 

.7 

.8 
.8 
.8 
.8 


0.1 

.1 

.1 

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

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

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

.9 

1.0 
1.1 
1.2 
1.1 
.9 
1.1 
1.2 
1.3 

1.1 
1.0 
1.1 
1.1 

1.1 
1.1 
1.2 
1.2 

1.3 
1.4 
1.3 
1.3 


4.6 

-4.9 

1.6 

6.2 

12.0 

5.2 

.1 

-2.3 

-3.6 

12.2 

-.2 

5.5 

-4.4 

10.6 

13.7 

4.3 

1.5 

-2.2 
7.7 
5.8 
1.5 

-1.8 
6.5 

4.4 
2.9 
8.1 
7.8 
7.3 
11.3 
16.7 
12.0 
8.7 
10.6 

4.3 
6.6 
9.4 

16.5 
8.0 
-9.8 
6.7 
8.9 

10.4 

7.5 
10.1 

9.3 
-.2 

5.8 
10.0 
12.2 

7.5 

12.3 

12.7 
9.0 
7.7 


2.2 

.2 

2.0 

3.0 

.8 

-2.5 

-7.3 

-7.2 

-4.5 

11.6 

16.6 

8.5 

8.8 

4.0 
7.4 
4.9 
2.0 
4.5 
4.7 
7.3 
8.9 
3.5 
.9 

5.5 
6.7 
5.8 
7.3 

10.9 
8.2 
4.3 
3.5 

-.4 
-1.3 

1.4 
-.6 
-3.3 

7.6 
15.9 
22.6 
15.4 

9.5 

8.6 

16.5 
16.1 
16.1 
13.1 

11.2 
11.0 
12.5 
3.1 

2.9 
11.3 

9.2 
11.0 


15.6 

9.4 

13.3 

14.6 
14.7 
10.3 
9.0 
10.0 
13.5 
26.1 
30.2 
24.2 
24.2 

21.7 
25.9 
24.9 
23.8 
25.3 
27.9 
32.3 
34.8 
30.7 
31.5 

35.8 
37.0 
39.6 
42.2 
47.8 
49.1 
51.6 
54.2 
58.5 
62.2 

67.1 
67.9 
72.7 
87.4 
93.0 
90.0 
95.9 
98.2 
107.3 

93.2 
95.2 
98.0 
97.3 

97.1 
98.9 
100.8 
96.0 

99.1 
108.4 
109.0 
112.6 


13.4 

9.3 

11.4 

11.5 
14.0 
12.8 
16.3 
17.3 
18.0 
14.6 
13.6 
15.7 
15.4 

17.7 

18.5 
20.0 
21.8 
20.8 
23.2 
25.0 
26.0 
27.2 
30.6 

30.3 
30.3 
33.9 
35.0 
36.9 
41.0 
47.3 
50.7 
58.9 
63.5 

65.7 
68.5 
75.9 
79.9 
77.1 
67.5 
80.5 
88.7 
98.7 

76.7 
79.2 
81.9 
84.2 

85.9 
87.9 
88.2 
92.9 

96.2 
97.1 
99.7 
101.6 


40.9 

42.8 

62.9 

65.2 
97.7 
191.5 
271.2 
300.3 
265.3 
93.0 
75.4 
84.1 
96.2 

97.7 
132.7 
159.5 
170.0 
154.9 
150.9 
152.4 
160.1 
169.3 
170.7 

172.9 
182.8 
193.1 
197.6 
202.7 
209.6 
229.3 
248.3 
259.2 
256.7 

250.2 
249.4 
253.1 
252.5 
257.7 
262.6 
262.8 
269.2 
275.2 

264.3 
263.2 
262.5 
261.3 

262.8 
267.9 
271.7 
274.5 

272.1 
271.9 
276.7 
280.1 


7.0 

10.9 

22.8 

26.7 
61.0 
157.4 
239.6 
269.7 
233.7 
58.2 
36.1 
42.4 
48.9 

47.0 
81.3 
107.0 
114.6 
95.2 
86.9 
85.9 
89.8 
92.8 
91.8 

90.8 
95.6 
103.1 
102.2 
100.6 
100.5 
112.5 
125.3 
128.3 
121.8 

110.7 
103.9 
102.1 
96.6 
95.8 
96.5 
96.6 
101.6 
100.5 

96.2 
95.9 
96.8 
97.5 

98.7 
101.3 
102.9 
103.6 

101.2 
97.1 
100.4 
103.3 


33.8 

31.9 

40.2 

38.5 
36.7 
34.1 
31.6 
30.6 
31.6 
34.7 
39.3 
41.8 
47.4 

50.7 
51.3 
52.5 
55.4 
59.7 
64.0 
66.5 
70.3 
76.4 
78.9 

82.0 
87.1 
90.0 
95.4 
102.1 
109.1 
116.8 
123.1 
130.9 
134.9 

139.5 
145.5 
151.0 
155.9 
161.8 
166.1 
166.2 
167.6 
174.7 

168.1 
167.3 
165.7 
163.8 

164.1 
166.6 
168.8 
170.9 

170.8 
174.8 
176.3 
176.8 




1933 

1939 

1940 

1941 

1942 

1943 

1944 

1945 

1946 

1947 

1948 

1949 

1950 

1951 

1952 

1953 

1954 

1955 

1956 

1957 

1958 

1959 

1960 

1961 

1962 

1963 

1964 

1965 

1966 

1967 

1968 

1969 

1970 

1971 

1972 

1973 

1974 

1975.. 

1976 

1977 

1978» 

1976: 1 

II 

III.... 
IV.... 

1977:1 

II 

III.— 
IV 

1978: 1 
II 
111 

IV * 


-2.2 

7.6 

7.7 

16.1 

15.5 

15.3 

7.1 

-1.5 

-14.8 

-1.8 

4.1 

.6 

8.7 
8.1 
3.8 
3.9 
-1.3 
6.7 
2.1 
1.8 
-.2 
6.0 

2.3 
2.5 
5.8 
4.0 
5.3 
5.9 
5.9 
2.7 
4.4 
2.6 

-.3 
3.0 
5.7 
5.5 
-1.4 
-1.3 
5.7 
4.9 
3.9 

9.3 
4.0 
2.7 
2.3 

7.3 
5.9 
5.7 
3.2 

-.1 
8.7 
2.6 
6.1 



1 Changes are based on unrounded data and therefore may differ slightly from those obtained from data shown here. 
Source: Department of Commerce, Bureau of Economic Analysis. 



185 



Table B-3. — Implicit price deflators for gross national product, 1929-78 
[Index numbers, 1972 = 100, except as noted; quarterly data seasonally adjusted] 



Year or 


Gross 


quarter 


national 




prod- 




uct' 


1929 


32.87 
25.14 


1933 


1939 


28.48 

29.13 
31.34 
34.39 
36.18 


1940 


1941 


1942 


1943..., 


1944 


37.03 
37.92 


1945 


1946 


43.95 
49.70 
53.13 
52.59 

53.64 
57.27 
58.00 
58.88 
59.69 
60.98 


1947 


1948 


1949 


1950 


1951 


1952 


1953 


1954 


1955 


1956 


62.90 
65.02 
66.06 
67.52 

68.67 
69.28 
70.55 
71.59 
72.71 
74.32 
76.76 
79.02 
82.57 
86.72 

91.36 
96.02 
100.00 
105. 80 
116.02 


1957 


1958 


1959 


1960 


1961 


1962 


1963 


1964 


1965 


1966 


1967 


1968 


1969 


1970 


1971 


1972 


1973 


1974... 


1975 


127. 15 
133. 76 


1976 


1977 


141.61 
152. 09 


1978 p 


1976:1 


131.40 


II 


132.92 


Ill 


134. 39 


IV 


136. 28 


1977:1 


138. 27 


II 


140. 86 


Ill 


142. 63 


IV 


144. 56 


1978:1 


147. 10 


II 


150.98 


Ill 


153. 52 


IV».... 


156.54 



Personal consumption expenditures 



Total 



35.8 

26.8 

30.4 

30.8 
33.1 
36.7 
40.0 
42.3 
44.0 
47.7 
52.8 
55.9 
55.7 

56.8 
60.5 
61.9 
63.1 
63.6 
64.2 
65.5 
67.6 
69.1 
70.4 

71.7 
72.5 
73.6 
74.7 
75.7 
77.1 
79.3 
81.3 
84.6 
88.5 

92.5 
96.6 
100.0 
105.5 
116.9 
126.4 
133.1 
140.7 
150.3 

130.7 
132.1 
133.8 
135.6 

137.9 
139.9 
141.6 
143.2 

146.2 
149.3 
151.6 
154.1 



Dur- 


Non- 


able 


durable 


goods 


goods 


43.1 


38.4 


31.7 


26.8 


34.9 


30.5 


35.7 


30.9 


39.1 


33.6 


42.1 


39.1 


45.0 


43.7 


49.5 


46.2 


53.7 


47.8 


61.1 


52.1 


66.8 


58.7 


69.1 


62.3 


69.1 


60.3 


70.8 


60.7 


74.7 


65.8 


74.8 


66.6 


75.5 


66.3 


73.2 


66.6 


74.0 


66.3 


76.0 


67.3 


79.2 


69.4 


79.4 


71.0 


81.9 


71.4 


82.1 


72.6 


82.7 


73.3 


83.9 


73.9 


84.8 


74.9 


85.7 


75.8 


85.6 


77.3 


85.7 


80.1 


87.4 


81.9 


90.7 


85.3 


93.1 


89.4 


95.5 


93.6 


99.0 


96.6 


100.0 


100.0 


101.6 


107.9 


108.4 


123.8 


117.7 


133.4 


124.4 


138.2 


129.5 


145.0 


136.6 


155.0 


122.0 


136.8 


123.6 


137.4 


125.0 


138.7 


126.8 


139.9 


128.4 


142.4 


128.9 


144.7 


129.5 


145.7 


130.9 


147.0 


133.1 


150.4 


135.7 


154.4 


137.8 


156.2 


139.5 


158.9 



Serv- 
ices 



31.6 

26.1 

29.2 

29.5 
30.8 
32.4 
34.2 
36.1 
37.3 
38.9 
41.7 
44.4 
46.1 

47.4 
49.9 
52.6 
55.4 
57.2 
58.5 
60.2 
62.2 
64.2 
66.0 

68.0 
69.1 
70.4 
71.7 
72.8 
74.3 
76.5 
78.8 
82.0 
86.1 

90.5 
95.8 
100.0 
104.7 
113.6 
123.2 
131.6 
141.0 
151.3 

128.4 
130.3 
132.5 
134.9 

137.4 
139.7 
142.3 
144.4 

147.1 
149.9 
152.6 
155.3 



Gross private domestic investment ■ 



Fixed investment 



Total 



28.2 

22.4 

27.6 

28.5 
30.6 
33.4 
35.6 
36.9 
37.1 
41.3 
48.9 
53.6 
54.8 

56.5 
60.8 
62.1 
62.9 
63.4 
64.8 
68.3 
70.9 
70.8 
71.6 

71.9 
71.6 
72.0 
72.1 
72.8 
73.8 
76.2 
78.7 
82.1 
86.9 

91.1 
95.9 
100.0 
106.0 
117.1 
132.3 
139.6 
150.6 
164.7 

136:7 
138.5 
140.3 
142.6 

145.4 
148.9 
151.9 
155.9 

158.2 
162.3 
1*7.1 
170.8 



Nonresidential 



Total 



28.2 

22.8 

28.2 

29.1 
30.9 
33.8 
35.7 
36.6 
36.6 
39.9 
46.8 
51.3 
52.8 

54.3 
58.9 
59.9 
61.0 
61.4 
62.6 
67.0 
70.7 
70.6 
72.0 

72.2 
71.8 
72.3 
72.9 
73.6 
74.5 
76.8 
79.3 
82.6 
86.6 

91.3 
96.4 
100.0 
103.8 
115.3 
132.2 
138.4 
146.7 
158.7 

136.6 
137.7 
138.9 
140.5 

142.5 
145.0 
147.9 
151.2 

153.6 
156.7 
160.6 
163.7 



Struc- 
tures 



24.1 

19.1 

22.8 

23.1 
24.7 
28.1 
32.0 
33.4 
33.6 
36.3 
43.7 
48.4 
48.0 

48.8 
54.7 
55.8 
56.8 
55.9 
57.0 
61.8 
64.4 
63.3 
63.6 

63.1 
62.7 
63.0 
63.5 
64.4 
65.9 
68.8 
71.8 
75.3 
81.1 

88.0 
94.4 
100.0 
107.8 
128.1 
144.9 
149.5 
159.6 
174.8 

147.4 
149.4 
149.7 
151.4 

154.9 
158.3 
160.2 
164.5 

167.2 
171.8 
177.3 
182.0 



See next page for continuation of table. 



186 



Table B-3. — Implicit price deflators for gross national product, 1929-78 — Continued 
[Index numbers, 1972=100, except as noted; quarterly data seasonally adjusted] 





Gross private domestic 
investment '—continued 


Exports and 
imports of 


Government purchases 


Gross 
do- 
mestic 
prod- 
uct 


Percen 

from p 

per 


change 




Fixed investment— continued 


goods and 
services > 


of goods and services 


od» 


Year or 


Residential 


Gross 
nationa 
product 
implicit 

price 
deflator 




quarter 


Ex- 
ports 


Im- 
ports 


Total 


Fed- 
eral 


State 
and 
local 


Gross 

do- 
mestic 
product 
implicit 

price 
deflator 




Total 


Non- 
farm 
struc- 
tures 


Farm 
struc- 
tures 


Pro- 
ducers 
dur- 
able 
equip- 
ment 


1929 


28.2 

20.7 

26.6 

27.4 
29.9 
32.4 
34.9 
38.1 
40.8 
44.6 
53.7 
58.1 
58.7 

60.0 
64.4 
66.4 
66.9 
67.1 
68.7 
70.9 
71.3 
71.2 
71.0 

71.4 
71.3 
71.5 
70.9 
71.2 
72.3 
74.6 
77.0 
80.7 
87.7 

90.6 
94.9 
100.0 
110.8 
122.3 
132.8 
142.5 
159.4 
178.7 

137.2 
140.7 
143.8 
147.6 

152.3 
157.6 
160.6 
166. 1 

168.6 
175.7 
182.6 
187.9 


27.8 

19.8 

26.3 

27.2 
29.7 
31.8 
34.3 
37.3 
40.0 
43.9 
53.0 
57.4 
58.1 

59.5 
63.8 
65.8 
66.3 
66.6 
68.2 
70.5 
70.8 
70.7 
70.6 

70.9 
70.9 
71.1 
70.5 
70.8 
72.0 
74.2 
76.7 
80.4 
87.5 

90.4 
94.8 
100.0 
111.0 
122.7 
133.2 
143.0 
160.0 
179. 8 

137.6 
141.1 
144.2 
148.1 

152.9 
158.2 
161.3 
166.9 

169.5 
176.7 
183.7 
189.1 


28.6 

19.5 

23.4 

23.6 
26.6 
30.7 
35.7 
40.8 
42.9 
46.6 
52.8 
57.3 
58.0 

59.4 
63.8 
65.7 
66.2 
66.5 
68.3 
70.6 
70.9 
70.8 
70.8 

71.2 
70.7 
71.3 
70.7 
71.0 
72.3 
74.3 
76.7 
80.5 
87.5 

90.5 
95.0 
100.0 
110.7 
122.7 
132.9 
142.6 
159.7 
178.9 

137.2 
141.0 
144.4 
148.0 

153.3 
158.7 
161.8 
167.5 

168.9 
176.5 
182.8 
186.9 


77.2 

58.8 

61.1 

59.6 
63.8 
71.3 
71.4 
75.0 
84.6 
95.2 
105.6 
111.5 
107.9 

107.4 
114.9 
114.6 
114.2 
112.4 
109.1 
104.3 
103.4 
101.9 
101.8 

100.8 
99.1 
96.8 
95.3 
94.3 
92.1 
90.8 
91.0 
93.2 
95.2 

97.5 
99.3 
100.0 
100.1 
105.3 
116.2 
122.2 
126.2 
132.2 

120.2 
121.8 
123.0 
123.6 

124.3 
126.2 
126.6 
127.5 

128.8 
131.8 
133.3 
135.1 


45.0 

25.5 

33.3 

36.8 
40.2 
46.5 
49.2 
52.6 
53.6 
56.7 
65.8 
69.8 
65.5 

64.0 
73.1 
73.0 
71.9 
71.2 
71.8 
73.9 
76.4 
75.7 
75.4 

77.1 
78.0 
77.3 
77.5 
78.3 
80.5 
82.8 
84.0 
85.3 
87.9 

93.1 

96.6 
100.0 
116.2 
148.3 
163.6 
170.1 
178.7 
191.2 

165.7 
168.7 
171.7 
174.0 

176.1 
180.0 
179.4 
179.2 

183.3 
189.4 
192.8 
198.4 


43.8 

22.1 

29.6 

31.5 
33.2 
37.4 
39.6 
41.1 
43.6 
49.7 
60.7 
66.1 
62.7 

67.8 
81.8 
79.1 
75.8 
76.9 
76.8 
78.3 
79.5 
76.5 
75.7 

76.7 
76.1 
74.5 
75.6 
77.1 
78.0 
79.7 
80.1 
80.9 
83.3 

89.1 
93.5 
100.0 
118.2 
171.0 
188.0 
193.5 
210.3 
219.9 

187.8 
190.7 
197.0 
197.8 

208.9 
209.3 
212.9 
210.2 

213.8 
217.2 
221.5 
226.8 


21.6 
19.3 
21.5 

21.7 

25.5 
31.2 
32.8 
32.3 
31.2 
29.6 
33.8 
38.0 
39.9 

39.4 
45.3 
47.4 
48.5 
48.9 
49.7 
52.1 
54.4 
56.1 
57.2 

58.0 
59.2 
61.1 
62.6 
64.0 
66.0 
69.2 
72.6 
76.7 
81.0 

87.5 
93.7 
100.0 
106.7 
117.5 
128.9 
136.8 
146.3 
157.8 

134.0 
135.7 
137.3 
140.2 

142.7 
145.1 
147.1 
150.3 

153.2 
156.2 
158.9 
162.7 


20.5 

19.4 

22.7 

22.7 
27.8 
33.0 
34. n 
33.1 
31.9 
30.2 
35.1 
39.4 
41.8 

39.9 
47.1 
48.9 
50.2 
50.4 
51.1 
53.4 
55.7 
58.1 
58.7 

59.1 
60.0 
61.8 
63.3 
64.8 
67.0 
70.1 
72.6 
76.4 
80.0 

86.4 
92.6 
100.0 
105.8 
115.9 
127.5 
134.4 
142.7 
153.2 

132.1 
133.3 
134.2 
138.0 

140.1 
141.1 
142.7 
146.9 

149.6 
151.5 
153.4 
158.2 


21.8 

19.2 

20.7 

21.0 
21.7 
22.9 
23.8 
24.9 
25.9 
28.6 
32.5 
36.6 
38.0 

39.0 
42.4 
44.2 
45.1 
46.6 
47.8 
50.4 
52.8 
53.8 
55.4 

56.8 
58.3 
60.3 
61.9 
63.3 
65.1 
68.4 
72.5 
76.9 
81.9 

88.3 
94.5 
100.0 
107.3 
118.4 
129.7 
138.1 
148.5 
160.4 

135.0 
137.1 
139.1 
141.5 

144.3 
147.6 
149.7 
152.3 

155.2 
158.8 
162.1 
165.2 


32.8 

25.2 

28.5 

29.1 
31.3 
34.4 
36.2 
37.0 
37.9 
43.9 
49.7 
53.1 
52.6 

53.6 
57.2 
57.9 
58.8 
59.6 
60.9 
62.8 
65.0 
66.0 
67.5 

68.6 
69.2 
70.5 
71.6 
72.7 
74.3 
76.8 
79.0 
82.6 
86.8 

91.4 
96.0 
100.0 
105.7 
115.6 
126.8 
133.3 
141.1 
151.5 

131.0 
132.5 
133.9 
135.8 

137.7 
140.3 
142.1 
144.1 

146.6 
150.4 
153.0 
156.0 






1933 


-2.1 

-.7 

2.3 

7.6 

9.7 

5.2 

2.3 

2.4 

15.9 

13.1 

6.9 

-1.0 

2.0 
6.8 
1.3 
1.5 
1.4 
2.2 
3.2 
3.4 
1.6 
2.2 

1.7 
.9 
1.8 
1.5 
1.6 
2.2 
3.3 
2.9 
4.5 
5.0 

5.4 
5.1 
4.1 
5.8 
9.7 
9.6 
5.2 
5.9 
7.4 

3.9 
4.7 
4.5 
5.7 

6.0 
7.7 
5.1 
5.5 

7.2 
11.0 
6.9 
8.1 


-2.0 

-.7 

2.3 
7.6 
9.7 
5.2 
2.3 
2.4 
15.9 
13.0 
6.9 
-1.0 

2 


1939 


1940 


1941 


1942 


1943 


1944 


1945 


1946 

1947 


1948 


1949 

1950 


1951 


6 7 


1952 


1.3 
1 5 


1953 


1954 


1.4 
2 2 


1955 


1956 


3 2 


1957 


3 4 


1958 


1 6 


1959 


2 2 


1960 


1 7 


1961.. 


9 


1962 

1963 


1.9 
1 5 


1964 


1 6 


1965... 


2 2 


1966.. 


3 3 


1967 


3 


1968 


4 5 


1969 


5.1 


1970 


5 3 


1971... 


5 1 


1972 


4.1 


1973 


5 7 


1974 


9 3 


1975 


9.7 


1976 


5.2 


1977 


5 8 


1978 » 

1976: 1 

III 
IV 

1977: 1 
II 
III 
IV 

1978: 1 
II 
III 
IV p.... 


7.4 

3.6 
4.8 
4.4 
5.8 

5.7 
7.7 
5.1 
5.8 

7.1 
10.9 
7.0 
8.1 



1 Separate deflators are not available for gross private domestic investment, change in business inventories, and net 
exports of goods and services. 

' Changes are based on unrounded data and therefore may differ slightly from those obtained from data shown here. 
Quarterly data are at annual rates. 

Source: Department of Commerce, Bureau of Economic Analysis. 

187 



Table B— 4. — Implicit price deflators and alternative price measures for gross national product 
and gross domestic product, 1929-78 

[Quarterly data seasonally adjusted) 





Index numbers, 1972= 


100 


Percent change from preceding period > 


Year or 


Gross national 
product 


Gross domestic 
product 


Gross national product 


Gross domestic product 


quarter 
























Fixed- 




Fixed- 




Fixed- 






Fixed- 






Implicit 


weighted 


Implicit 


weighted 


Implicit 


weighted 


Chain 


Implicit 


weighted 


Chain 




price 


price index 


price 


price index 


price 


price index 


price 


price 


price index 


price 
index 




deflator 


(1972 


deflator 


(1972 


deflator 


(1972 


index 


deflator 


(1972 






weights) 




weights) 




weights) 






weights) 




1929 


32.87 

25.14 

28.48 

29.13 
31.34 
34.39 
36.18 
37.03 
37.92 
43.95 
49.70 
53.13 
52.59 

53.64 
57.27 
58.00 
58.88 
59.69 
60.98 
62.90 
65.02 
66.06 
67.52 




32.8 

25.2 

28.5 

29.1 
31.3 
34.4 
36.2 
37.0 
37.9 
43.9 
49.7 
53.1 
52.6 

53.6 
57.2 
57.9 
58.8 
59.6 
60.9 
62.8 
65.0 
66.0 
67.5 
















1933 






-2.1 

-.7 

2.3 
7.6 
9.7 
5.2 
2.3 
2.4 
15.9 
13.1 
6.9 
-1.0 

2.0 
6.8 
1.3 
1.5 
1.4 
2.2 
3.2 
3.4 
1.6 
2.2 






-2.0 

-.7 

2.3 
7.6 
9.7 
5.2 
2.3 
2.4 
15.9 
13.0 
6.9 
-1.0 

2.0 
6.7 
1.3 
1.5 
1.4 
2.2 
3.2 
3.4 
1.6 
2.2 






1939 














1940 














1941. 














1942 . 














1943 














1944 














1945.. 














1946 














1947 














1948 














1949 














1950 














1951 














1952 














1953 














1954... 














1955 














1956 














1957... 














1958 


68.1 
69.1 


68.0 
69.1 










1959 


1.6 


1.6 


1.6 


1.6 


1960 


68.67 


70.3 


68.6 


70.2 


1.7 


1.7 


1.7 


1.7 


1.7 


1.7 


1961 


69.28 


71.1 


69.2 


71.1 


.9 


1.1 


1.2 


.9 


1.2 


1.2 


1962 


70.55 


72.0 


70.5 


72.0 


1.8 


1.3 


1.4 


1.9 


1.3 


1.5 


1963 


71.59 


72.8 


71.6 


72.8 


1.5 


1.1 


1.3 


1.5 


1.1 


1.3 


1964 


72.71 


73.7 


72.7 


73.7 


1.6 


1.2 


1.4 


1.6 


1.2 


1.4 


1965 


74.32 


75.0 


74.3 


75.0 


2.2 


1.8 


1.9 


2.2 


1.8 


1.9 


1966 


76.76 


77.2 


76.8 


77.2 


3.3 


2.9 


3.1 


3.3 


3.0 


3.1 


1967 


79.02 


79.5 


79.0 


79.6 


2.9 


3.0 


3.0 


3.0 


3.0 


3.1 


1968 


82.57 


83.0 


82.6 


83.0 


4.5 


4.3 


4.4 


4.5 


4.4 


4.4 


1969 


86.72 


87.1 


86.8 


87.1 


5.0 


5.0 


5.0 


5.1 


5.0 


5.0 


1970 


91.36 


91.6 


91.4 


91.7 


5.4 


5.2 


5.3 


. 5.3 


5.2 


5.3 


1971 


96.02 


96.1 


96.0 


96.2 


5.1 


4.9 


5.0 


5.1 


4.9 


5.0 


1972 


100.00 


100.0 


100.0 


100.0 


4.1 


4.0 


4.1 


4.1 


4.0 


4.1 


1973 


105. 80 


106. 


105.7 


105.9 


5.8 


6.0 


6.0 


5.7 


5.9 


5.9 


1974 


116.02 


116.8 


115.6 


116.4 


9.7 


10.2 


9.9 


9.3 


9.9 


9.6 


1975 


127. 15 


127.7 


126.8 


127.2 


9.6 


9.3 


9.4 


9.7 


9.3 


9.4 


1976 


133.76 


134.9 


133.3 


134.4 


5.2 


5.6 


5.6 


5.2 


5.7 


5.7 


1977 


141.61 


143.3 


141.1 


142.8 


5.9 


6.3 


6.2 


5.8 


6.3 


6.1 


1978 » 


152.09 


154.3 


151.5 


153.8 


7.4 


7.6 


7.5 


7.4 


7.7 


7.6 


1976: 1 


131.40 


132.2 


131.0 


131.8 


3.9 


4.3 


4.5 


3.6 


4.2 


4.5 


II 


132. 92 


133.8 


132.5 


133.4 


4.7 


4.9 


5.0 


4.8 


4.9 


5.0 


III.... 


134.39 


135.5 


133.9 


135.0 


4.5 


5.1 


5.2 


4.4 


5.0 


5.1 


IV.... 


136.28 


137.6 


135.8 


137.2 


5.7 


6.4 


6.3 


5.8 


6.5 


6.4 


1977: 1 


138.27 


139.9 


137.7 


139.4 


6.0 


7.0 


6.6 


5.7 


6.8 


6.4 


II 


140.86 


142.5 


140.3 


142.0 


7.7 


7.4 


7.3 


7.7 


7.5 


7.4 


III.... 


142. 63 


144.1 


142.1 


143.6 


5.1 


4.7 


4.6 


5.1 


4.6 


4.5 


IV.... 


144.56 


146.5 


144.1 


146.0 


5.5 


6.8 


6.5 


5.8 


7.0 


6.7 


1978: 1 


147. 10 


149.0 


146.6 


148.5 


7.2 


7.0 


7.1 


7.1 


7.0 


7.1 


II 


150. 98 


152.9 


150.4 


152.5 


11.0 


11.0 


10.8 


10.9 


11.0 


10.9 


III.... 


153.52 


155.8 


153.0 


155.3 


6.9 


7.6 


7.6 


7.0 


7.6 


7.5 


IV»... 


156. 54 


159. 


156.0 


158.6 


8.1 


8.7 


8.5 


8.1 


8.7 


8.4 



1 Changes are based on unrounded data and therefore may differ slightly from those obtained from published Indexes 
shown here. Quarterly data are at annual rates. 

Source: Department of Commerce, Bureau of Economic Analysis. 



188 



Table B-5. — Gross national product by industry in 1972 dollars, 1947-77 
[Billions of 1972 dollars] 





Gross 
na- 
tional 
product 


Agri- 
culture, 
fores- 
try, 
and 
fish- 
eries 


Con- 
struc- 
tion 


Ma 


nufacturing 


Trans- 
porta- 
tion, 
com- 
muni- 
cation, 
and 
utili- 
ties 


Whole- 
sale 
and 
retail 
trade 


Finance, 
insur- 
ance, 

and 

real 
estate 


Serv- 
ices 


Gov- 
ern- 
ment 
and 
govern- 
ment 
enter- 
prises 




Year 


Total 


Du- 
rable 
goods 
indus- 
tries 


Non- 
durable 
goods 
indus- 
tries 


All 
other i 


1947 


468.3 
487.7 
490.7 

533.5 
576.5 
598.5 
621.8 
613.7 

654.8 
668.8 
680.9 
679.5 
720.4 

736.8 
755.3 
799.1 
830.7 
874.4 

925.9 

981.0 

1,007.7 

1,051.8 

1,078.8 

1,075.3 
1, 107. 5 
1,171.1 
1,235.0 
1,217.8 

1, 202. 3 
1,271.0 
1, 332. 7 


26.1 
28.0 
27.8 

29.1 
28.2 
29.0 
30.3 
31.1 

31.9 
31.4 
30.8 
32.0 
30.9 

32.2 
32.3 
32.3 
32.8 
32.1 

33.0 
31.3 
32.6 
32.4 
33.0 

34.3 
36.1 
35.4 
35.9 
35.7 

37.0 
36.0 
38.3 


22.9 

26.5 
26.5 

29.3 
32.5 
33.8 
34.8 
36.0 

38.2 

40.9 
40.9 
42.1 
45.5 

46.1 
46.6 
48.3 
49.8 
53.7 

57.0 
59.0 
59.5 
62.5 
61.2 

57.1 
57.1 
58.0 
58.3 
56.0 

49.8 
53.4 
56.9 


114.9 
121.5 
115.0 

131.3 
146.0 
150.7 
161.2 
149.6 

165.8 
166.9 
167.8 
153.3 
170.7 

172.0 
171.2 
186.2 
201.0 
215.7 

235.1 
254.0 
254.1 
268.4 
276.2 

260.6 
264.1 
288.8 
313.0 
291.9 

277.1 
303.2 
322.3 


68.5 
72.0 
66.3 

78.1 
89.9 
94.3 
102.6 
91.7 

103.4 
102.5 
102.9 
88.8 
100.7 

101.5 
99.3 
110.1 
119.0 
129.3 

144.1 
157.0 
157.2 
165.5 
169.1 

154.4 
155.3 
171.9 
189.0 
176.0 

162.2 

178.1 
190.9 


46.4 
49.6 
48.8 

53.2 
56.1 
56.4 
58.6 
57.9 

62.4 

64.4 
64.9 
64.5 
70.0 

70.5 
72.0 
76.2 
82.1 
86.4 

91.0 
97.0 
96.9 
102.9 
107.2 

106.2 
108.7 
116.8 
124.1 
115.9 

114.9 
125.0 
131.5 


38.3 
38.7 
36.4 

39.6 
44.2 
44.3 
45.9 
45.6 

49.4 
52.3 
53.4 
52.2 
55.7 

58.0 
59.1 
62.1 
65.6 
68.9 

74.3 
80.0 
82.3 
88.2 
92.9 

95.1 
97.3 
103.6 
112.6 
112.4 

113.5 
119.7 
124.0 


76.1 
78.0 
79.9 

87.6 
88.3 
91.1 
94.0 
94.6 

103.2 
106.2 
108.0 
107.9 
115.8 

117.9 

119.2 
126.7 
131.7 
139.7 

148.6 
156.9 
160.7 
170.6 
174.5 

178.4 
186.8 
201.2 
212.0 
205.7 

206.2 
218.0 
227.9 


55.4 
57.1 
60.7 

64.4 
66.7 
71.1 
74.0 
77.7 

82.0 
85.7 
89.8 
93.5 
98.1 

101.9 
106.8 
115.3 
115.3 
119.3 

127.2 
131.4 
136.5 
142.9 
149.3 

152.9 
160.6 
167.3 
171.1 
180.3 

182.3 
193.0 
204.0 


55.1 
56.7 
57.2 

59.4 
60.6 
61.6 
63.0 
63.1 

67.5 
71.1 
73.3 
75.8 
80.3 

82.2 
85.4 
88.6 
92.2 
96.9 

101.2 
106.5 
112.7 
116.3 
121.4 

124.7 
126.6 
134.5 
143.1 
144.7 

145.2 
151.6 
159.0 


68.5 
69.0 
73.1 

75.4 
89.8 
96.6 
96.4 
94.9 

95.4 
97.6 
100.1 
101.7 
103.6 

107.2 
111.1 
115.1 
118.3 
122.6 

127.4 
136.4 
143.5 
148.1 
151.8 

152.0 
153.1 
154.9 
157.3 
160.0 

162.7 
164.5 
165.7 


11.1 


1948 


12.0 


1949 


14.1 


1950 


17.5 


1951 


20.2 


1952 


20.2 


1953 

1954 


22.3 
21.1 


1955 


21.4 


1956 


16.6 


1957 


16.8 


1958.. 


21.0 


1959 


20.0 


1960 


19.4 


1961.. 


23.6 


1962 


24.5 


1963 


24.1 


1964 


25.6 


1965 


22.1 


1966 


25.4 


1967 


25.7 


1968 


22.4 


1969 


18.4 


1970 


20.4 


1971.... 


25.7 


1972 


27.7 


1973 


31.6 


1974 


31.1 


1975 


28.6 


1976 


31.6 


1977 


34.5 







1 Mining, rest of the world, and residual (GNP in 1972 dollars measured as the sum of final products less GNP in 1972 
dollars measured as the sum of gross product by industry). 

Note.— The industry classification is on an establishment basis and is based on the 1972 Standard Industrial Classification. 
Source: Department of Commerce, Bureau of Economic Analysis. 



189 



Table B-6. — Gross national product by major type of product, 1929-78 
(Bitlicns of dollars; quarterly data at seasonally adjusted annual rates) 





Gross 
national 
product 


Final 
sales 


Inven- 
tory 
change 


Goods 


Serv- 
ices 


Struc- 
tures 




Year 

or 
quar- 


Total 


Durable Nondurable 
goods goods 


Auto 
out- 


ter 


Total 


Final 
sales 


Inven- 
tory 
change 


Final 
sales 


Inven- 
tory 
change 


Final 
sales 


Inven- 
tory 
change 


put 


1929.. 

1933.. 

1939. . 

1940.. 
1941.. 
1942.. 
1943.. 
1944.. 
1945.. 
1946.. 
1947.. 
1948.. 
1949.. 

1950.. 
1951.. 
1952.. 
1953.. 
1954.. 
1955.. 
1956.. 
1957.. 
1958.. 
1959.. 

I960.. 
1961.. 
1962. . 
1963.. 
1964.. 
1965.. 
1966.. 
1967- . 
1968.. 
1969.. 

1970.. 
1971.. 
1972.. 
1973.. 
1974.. 
1975.. 
1976.. 
1977.. 
1978 v. 

1976: 
1... 
II. .. 
III.. 
IV.. 

1977: 
1... 
II... 
III.. 
IV.. 

1978: 
1... 
II... 
III.. 
IVp. 


103.4 

55.8 

90.8 

100.0 
124.9 
158.3 
192.0 
210.5 
212.3 
209.6 
232.8 
259.1 
258.0 

286.2 
330.2 
347.2 
366.1 
366.3 
399.3 
420.7 
442.8 
448.9 
486.5 

506.0 
523.3 
563.8 
594.7 
635.7 
688.1 
753.0 
796.3 
868.5 
935.5 

982.4 
1,063.4 
1,171.1 
1, 306. 6 
1,412.9 
1, 528. 8 
1, 700. 1 
1,887.2 
2, 106. 6 

1, 649. 7 
1, 685. 4 
1,715.6 
1, 749. 8 

1, 806. 8 
1, 867. 
1,916.8 
1, 958. 1 

1, 992. 

2, 087. 5 
2, 136. 1 
2,210.8 


101.7 
57.4 
90.4 

97.8 

120.4 
156.5 
192.5 
211.5 
213.4 
203.2 
233.2 
254.4 
261.1 

279.4 
319.9 
344.0 
365.7 
367.8 
393.3 
416.0 
441.4 
450.4 
481.2 

502.2 
521.1 
557.3 
588.8 
629.9 
678.6 
738.7 
786.2 
860.8 
926.2 

978.6 
1,057.1 
1,161.7 
1, 288. 6 
1, 404. 
1, 539. 6 

1, 689. 9 
1,871.6 

2, 090. 9 

1, 638. 3 
1, 670. 1 
1,701.0 
1, 750. 4 

1, 796. 5 
1, 850. 

1, 894. 9 
1,945.0 

1. 975. 3 

2, 067. 4 
2,122.5 

2. 198. 4 


1.7 

-1.6 

.4 

2.2 

4.5 

1.8 

-.6 

-1.0 

-1.0 

6.4 

-.5 

4.7 

-3.1 

6.8 

10.3 

3.1 

.4 

-1.5 
6.0 
4.7 
1.3 

-1.5 
5.2 

3.8 
2.2 
6.5 
6.0 
5.8 
9.5 
14.3 
10.1 
7.7 
9.4 

3.8 
6.4 
9.4 
17.9 
8.9 
-10.7 
10.2 
15.6 
15.7 

11.4 
15.4 
14.5 
-.6 

10.3 
17.0 
21.9 
13.1 

16.7 
20.1 
13.6 
12.4 


56.1 

27.0 

49.0 

56.0 
72.5 
93.7 
120.4 
132.3 
128.9 
125.3 
139.8 
154.4 
147.7 

162.4 
189.5 
194.6 
203.1 
196.1 
214.5 
223.3 
232.3 
228.2 
247.4 

254.3 
256.5 
278.0 
289.7 
309.0 
336.6 
373.9 
387.3 
418.9 
446.2 

456.2 
479.8 
526.0 
598.8 
638.6 
686.6 
760.3 
832.6 
917.5 

741.9 
758.0 
768.1 
772.9 

800.2 
825.8 
844.7 
859.6 

861.8 
912.2 
927.3 
968.6 


54.4 

28.6 

48.6 

53.8 
68.0 
91.9 
121.0 
133.3 
129.9 
118.9 
140.3 
149.7 
150.8 

155.6 
179.2 
191.5 
202.7 
197.6 
208.5 
218.6 
231.0 
229.7 
242.2 

250.6 
254.3 
271.5 
283.7 
303.2 
327.1 
359.6 
377.2 
411.2 
436.8 

452.4 
473.5 
516.6 
580.9 
629.7 
697.3 
750.1 
817.0 
901.8 

730.5 
742.6 
753.6 
773.5 

789.9 
808.8 
822.8 
846.5 

845.1 
892.1 
913.7 
956.2 


1.7 

-1.6 

.4 

2.2 

4.5 

1.8 

-.6 

-1.0 

-1.0 

6.4 

-.5 

4.7 

-3.1 

6.8 

10.3 

3.1 

.4 

-1.5 
6.0 
4.7 
1.3 

-1.5 
5.2 

3.8 
2.2 
6.5 
6.0 
5.8 
9.5 
14.3 
10.1 
7.7 
9.4 

3.8 
6.4 
9.4 
17.9 
8.9 
-10.7 
10.2 
15.6 
15.7 

11.4 
15.4 
14.5 
-.6 

10.3 
17.0 
21.9 
13.1 

16.7 
20.1 
13.6 
12.4 


16.1 

5.4 

12.4 

15.4 
23. o 
34.5 
54.2 
58.5 
50.1 
31.8 
44.1 
46.9 
48.3 

54.7 

62.5 
67.6 
71.5 
69.0 
78.2 
82.3 
87.3 
80.5 
87.4 

89.1 
90.2 
98.4 
105.4 
115.0 
127.0 
139.0 
143.5 
157.4 
169.2 

170.7 
179.8 
202.1 
229.6 
240.8 
267.9 
299.3 
332.9 
364.8 

288.4 
295.3 
303.1 
310.4 

326.1 
330.0 
334.6 
341.1 

336.3 
365.0 
369.8 
388.0 


1.4 

-.5 

.3 

1.2 

3.1 

1.0 

.0 

-.6 

-1.3 

5.3 

1.7 

.7 

-2.1 

4.1 

6.9 

1.1 

.9 

-2.5 
3.0 
2.8 
1.3 

-2.8 
2.7 

2.4 
-.1 
3.6 
2.7 
3.9 
6.6 
10.0 
5.3 
5.0 
6.1 

.0 
1.8 
6.3 
10.9 
7.1 
-8.9 
5.3 
8.4 
11.5 

.1 
6.5 
9.3 
5.2 

6.1 
9.1 
11.9 
6.3 

14.8 
10.8 
10.2 
10.1 


38.3 

23.2 

36.2 

38.4 
44.2 
57.4 
66.8 
74.8 
79.8 
87.1 
96.2 
102.8 
102.5 

100.9 
116.7 
123.9 
131.2 
128.7 
130.3 
136.3 
143.7 
149.2 
154.8 

161.4 
164.1 
173.2 
178.3 
188.2 
200.1 
220.6 
233.7 
253.8 
267.6 

281.7 
293.7 
314.5 
351.3 
389.0 
429.4 
450.7 
484.1 
537.0 

442.1 
447.3 
450.4 
463.1 

463.8 
478.8 
488.2 
505.4 

508.7 
527.1 
543.9 
568.2 


0.3 

-1.1 

.1 

1.0 

1.4 

.7 

-.6 

-.3 

.2 

1.1 

-2.2 

4.0 

-1.0 

2.7 
3.4 
2.0 
-.5 
1.0 
2.9 
1.9 
.0 
1.3 
2.5 

1.4 
2.3 
2.9 
3.3 
1.9 
2.9 
4.3 
4.8 
2.8 
3.3 

3.7 
4.6 
3.2 
7.0 
1.8 
-1.8 
4.9 
7.2 
4.2 

11.3 

8.9 

5.3 

-5.8 

4.2 
7.9 
10.0 
6.8 

1.9 
9.3 
3.4 
2.4 


35.9 
25.9 
34.3 

35.7 

40.6 
50.6 
62.9 
72.2 
76.9 
68.6 
71.3 
76.7 
81.9 

88.2 
102.9 
113.1 
121.0 
125.7 
135.3 
145.2 
157.5 
166.9 
179.5 

193.2 
206.7 
221.5 
236.2 
254.4 
272.7 
297.7 
326.1 
356.6 
388.7 

424.6 
465.5 
510.8 
560.5 
626.8 
697.6 
778.0 
862.8 
962.9 

749.7 
766.9 
787.1 
803.1 

832.3 
850.0 
875.3 
893.6 

926.4 
952.0 
973.7 
999.4 


11.4 

2.9 

7.5 

8.3 

11.8 

14.0 

8.7 

6.1 

6.5 

15.7 

21.7 

28.0 

28.4 

35.6 
37.8 
39.4 
42.0 
44.5 
49.5 
52.2 
53.0 
53.8 
59.5 

58.4 
60.1 
64.3 
68.9 
72.4 
78.8 
81.4 
82.9 
93.0 
100.7 

101.6 
118.1 
134.3 
147.2 
147.4 
144.7 
161.9 
191.8 
226.2 

158.1 
160.5 
160.3 
168.7 

174.3 
191.3 
196.8 
204.9 

203.8 
223.4 
235.0 
242.8 


7.3 
8.9 
12.0 

15.5 
13.4 
12.2 
16.3 
14.9 
21.5 
17.2 
19.6 
14.6 
19.6 

21.6 
18.1 
22.9 
25.6 
26.5 
31.8 
31.1 
28.8 
36.6 
36.8 

30.6 
42.2 
45.1 
50.7 
42.9 
45.6 
61.4 
72.3 
77.4 

60.5 
61.9 
59.5 
63.8 

72.7 
72.1 
70.0 
74.5 

73.8 
79.5 
75.8 
80.7 



Source: Department of Commerce, Bureau of Economic Analysis. 



190 



Table B-7. — Gross national product by major type of product in 1972 dollars, 1929-78 
[Billions of 1972 dollars; quarterly data at seasonally adjusted annual rates] 



Gross 


Final 
sales 


Inven- 


national 


tory 


product 


change 


314.6 


310.0 


4.6 


222.1 


226.9 


-4.9 


318.8 


317.2 


1.6 


343.3 


337.1 


6.2 


398.5 


386.4 


12.0 


460.3 


455.1 


5.2 


530.6 


530.5 


.1 


568.6 


570.9 


-2.3 


560.0 


563.6 


-3.6 


476.9 


464.7 


12.2 


468.3 


468.5 


-.2 


487.7 


482.2 


5.5 


490.7 


495.1 


-4.4 


533.5 


522.9 


10.6 


576.5 


562.8 


13.7 


598.5 


594.2 


4.3 


621.8 


620.3 


1.5 


613.7 


615.8 


-2.2 


654.8 


647.1 


7.7 


668.8 


663.0 


5.8 


680.9 


679.4 


1.5 


679.5 


681.3 


-1.8 


720.4 


714.0 


6.5 


736.8 


732.4 


4.4 


755.3 


752.4 


2.9 


799.1 


791.0 


8.1 


830.7 


823.0 


7.8 


874.4 


867.1 


7.3 


925.9 


914.6 


11.3 


981.0 


964.3 


16.7 


1,007.7 


995.7 


12.0 


1,051.8 


1,043.1 


8.7 


1, 078. 8 


1,068.2 


10.6 


1,075.3 


1,071.0 


4.3 ■ 


1,107.5 


1,100.9 


6.6 


1,171.1 


1,161.7 


9.4 


1, 235. 


1,218.5 


16.5 


1,217.8 


1,209.9 


8.0 


1,202.3 


1,212.1 


-9.8 


1,271.0 


1, 264. 4 


6.7 


1, 332. 7 


1, 323. 8 


8.9 


1, 385. 1 


1,374.7 


10.4 


1,255.5 


1, 248. 


7.5 


1, 268. 


1,258.0 


10.1 


1,276.5 


1, 267. 3 


9.3 


1,284.0 


1,284.2 


-.2 


1, 306. 7 


1, 300. 9 


5.8 


1,325.5 


1,315.5 


10.0 


1, 343. 9 


1,331.7 


12.2 


1, 354. 5 


1, 347. 1 


7.5 


1, 354. 2 


1,341.8 


12.3 


1,382.6 


1, 369. 9 


12.7 


1,391.4 


1,382.4 


9.0 


1,412.2 


1,404.5 


7.7 



Goods 





Total 




Durable 
goods 


Total 


Final 
sales 


Inven- 
tory 
change 


Final 
sales 


Inven- 
tory 
change 


143.9 


139.3 


4.6 


40.7 


3.5 


97.2 


102.1 


-4.9 


17.6 


-2.1 


153.9 


152.3 


1.6 


35.6 


.7 


171.2 


165.0 


6.2 


43.1 


3.4 


197.4 


185.4 


12.0 


57.5 


8.2 


221.1 


215.9 


5.2 


76.0 


3.5 


263.5 


263.4 


.1 


119.3 


.7 


286.8 


289.1 


-2.3 


135.9 


-1.8 


279.2 


282.8 


-3.6 


121.9 


-3.7 


238.0 


225.8 


12.2 


60.5 


10.8 


236.8 


237.0 


-.2 


74.9 


1.8 


244.2 


238.7 


5.5 


75.6 


1.5 


239.9 


244.3 


-4.4 


76.1 


-3.7 


261.5 


250.9 


10.6 


84.4 


6.3 


283.1 


269.4 


13.7 


92.6 


9.8 


292.3 


288.0 


4.3 


100.6 


1.8 


306.9 


305.4 


1.5 


105.9 


1.4 


292.2 


294.4 


-2.2 


101.7 


-3.6 


316.3 


308.6 


7.7 


112.9 


4.2 


320.9 


315.1 


5.8 


113.5 


3.7 


321.8 


320.3 


1.5 


114.6 


1.5 


312.0 


313.8 


-1.8 


104.8 


-3.4 


332.5 


326.1 


6.5 


110.6 


3.3 


337.1 


332.8 


4.4 


111.6 


2.9 


338.1 


335.2 


2.9 


112.6 


-.1 


362.0 


353.8 


8.1 


121.1 


4.4 


373.0 


365.2 


7.8 


128.4 


3.4 


394.0 


386.7 


7.3 


139.2 


5.0 


421.5 


410.2 


11.3 


152.6 


8.0 


455.6 


438.9 


16.7 


165.2 


11.9 


461.9 


449.9 


12.0 


166.6 


6.4 


481.1 


472.4 


8.7 


175.7 


5.6 


492.3 


481.7 


10.6 


183.3 


6.8 


483.4 


479.1 


4.3 


179.1 


.1 


491.6 


484.9 


6.6 


181.5 


1.8 


526.0 


516.6 


9.4 


202.1 


6.2 


569.0 


552.5 


16.5 


225.9 


10.6 


554.2 


546.2 


8.0 


222.7 


5.6 


538.3 


548.0 


-9.8 


219.8 


-7.0 


576.5 


569.8 


6.7 


232.5 


3.6 


608.4 


599.6 


8.9 


248.0 


5.8 


629.1 


618.7 


10.4 


257.8 


7.2 


568.5 


561.0 


7.5 


228.7 


.2 


576.3 


566.2 


10.1 


231.1 


4.6 


580.8 


571.5 


9.3 


234.0 


6.3 


580.3 


580.5 


-.2 


236.2 


3.5 


596.0 


590.1 


5.8 


246.5 


4.4 


604.4 


594.3 


10.0 


246.9 


6.1 


613.3 


601.1 


12.2 


248.0 


7.9 


620.1 


612.7 


7.5 


250.5 


4.6 


611.8 


599.4 


12.3 


245.0 


9.6 


627.7 


615.0 


12.7 


260.2 


6.4 


630.2 


621.2 


9.0 


258.7 


6.1 


646.8 


639.1 


7.7 


267.6 


6.6 



Nondurable 
goods 



Final 
sales 



98.6 
84.5 

116.7 

121.8 
127.9 
140.0 
144.1 
153.2 
161.0 
165.3 
162.1 
163.1 
168.2 

166.5 
176.8 
187.4 
199.5 
192.7 
195.7 
201.6 
205.6 
209.0 
215.5 

221.2 
222.7 
232.7 
236.8 
247.5 
257.7 
273.7 
283.3 
296.7 
298.4 

300.0 
303.4 
314.5 
326.6 
323.5 
328.2 
337.3 
351.6 
360.8 



332.3 
335.2 
337.4 
344.3 



343.6 
347.5 
353.1 
362.1 



354.5 
354.8 
362.5 
371.5 



Inven- 
tory 
change 



1.1 

-2.8 

.9 

2.8 
3.8 
1.7 
-.6 
-.5 
.1 
1.3 
-2.0 
4.0 



4.2 
3.9 
2.5 

.1 
1.4 
3.5 
2.1 

.0 
1.6 
3.2 

1.5 
3.0 
3.7 
4.3 
2.3 
3.3 
4.8 
5.6 
3.2 
3.7 

4.2 
4.8 
3.2 
5.9 
2.4 
-2.7 
3.0 
3.1 
3.3 



7.3 
5.4 
3.0 
-3.7 



1.4 
3.9 
4.3 
2.9 



2.7 
6.3 
2.9 
1.1 



Serv- 
ices 



126.8 

110.9 

134.6 

139.5 
157.6 
192.7 
240.9 
263.6 
261.9 
199.7 
186.9 
190.9 
197.0 

206.0 
229.0 
240.6 
245.5 
247.0 
257.6 
267.2 
279.3 
285.6 
298.0 

310.7 
325.5 
339.9 
354.0 
372.2 
389.1 
410.2 
432.7 
449.9 
465.4 

477.2 
491.1 
510.8 
531.1 
546.4 
560.1 
583.0 
602.9 
627.2 



575.5 
580.5 
585.8 
589.9 



596.3 
598.8 
606.9 
609.6 



620.1 
625.6 
629.7 
633.3 



Struc- 
tures 



44.0 
14.0 

30.3 

32.6 
43.4 
46.4 
26.3 
18.1 
18.9 
39.2 
44.7 
52.5 
53.7 

66.0 
64.4 
65.6 
69.4 
74.5 
80.9 
80.7 
79.9 
81.9 
89.9 

89.0 
91.7 
97.2 
103.8 
108.1 
115.3 
115.2 
113.1 
120.9 
121.1 

114.6 
124.9 
134.3 
134.8 
117.2 
104.0 
111.6 
121.3 
128.8 



111.5 
111.2 
109.9 
113.8 



114.5 
122.3 
123.7 
124.8 



122.3 
129.3 
131.6 
132.2 



Source: Department of Commerce, Bureau of Economic Analysis. 



191 



Table B-8. — Gross national product: Receipts and expenditures by major 
economic groups, 1929-78 

[Billions of dollars] 





Persons 


Government 




Disposable personal 
income 


Per- 
sonal 
con- 
sump- 
tion 
ex- 
pendi- 
tures 


Per- 
sonal 


Net receipts 


Expenditures 


Sur- 
plus 


Year or 




Less: 
Inter- 
est 
paid 
and 
trans- 
fers* 


Equals: 
Total 
exclud- 


Tax 


Less: 






Less: 


Equals: 


or 
deficit 
(-). 


quarter 




saving 
or 


and 
non- 


Trans- 
fers, 


Equals: 


Total 


Trans- 
fers, 


Pur- 
chases 


na- 
tional 




Total i 


terest 
paid 
and 

trans- 


dis- 
saving 


tax 

re- 


inter- 
est, 


Net 
re- 


ex- 
pendi- 


inter- 
est, 


of 
goods 


in- 
come 






(-) 


ceipts 
or ac- 
cruals 


and 
sub- 
sidies 3 


ceipts 


tures 


and 
sub- 
sidies 1 


and 
serv- 
ices 


and 
prod- 
uct ac- 


























counts 


1929 


82.3 


1.9 


80.4 


77.3 


3.1 


11.3 


1.5 


9.8 


10.3 


1.5 


8.8 


1.0 


1933 


45.5 


.7 


44.8 


45.8 


-1.0 


9.3 


2.5 


6.9 


10.7 


2.5 


8.2 


-1.4 


1939 


69.9 


.9 


69.1 


67.0 


2.1 


15.4 


4.1 


11.3 


17.6 


4.1 


13.5 


-2.2 


1940 


75.2 


1.0 


74.3 


71.0 


3.3 


17.7 


4.3 


13.5 


18.4 


4.3 


14.2 


-.7 


1941 


92.0 


1.1 


91.0 


80.8 


10.2 


25.0 


3.8 


21.2 


28.8 


3.8 


24.9 


-3.8 


1942 


116.5 


.8 


115.6 


88.6 


27.0 


32.6 


4.2 


28.4 


64.0 


4.2 


59.8 


-31.4 


1943 


132.9 


.7 


132.1 


99.4 


32.7 


49.2 


4.4 


44.7 


93.3 


4.4 


88.9 


-44.1 


1944 


145.5 


.8 


144.6 


108.2 


36.5 


51.2 


6.0 


45.2 


103.0 


6.0 


97.0 


-51.8 


1945... 


149.0 


.9 


148.0 


119.5 


28.5 


53.2 


9.9 


43.3 


92.7 


9.9 


82.8 


-39.5 


1946 


158.6 


1.4 


157.3 


143.8 


13.4 


51.0 


18.0 


33.0 


45.6 


18.0 


27.5 


5.4 


1947 


168.4 


1.7 


166.7 


161.7 


4.9 


56.9 


17.1 


39.9 


42.5 


17.1 


25.5 


14.4 


1948... 


187.4 


2.1 


185.3 


174.7 


10.6 


58.9 


18.5 


40.4 


50.5 


18.5 


32.0 


8.4 


1949 


187.1 


2.3 


184.9 


178.1 


6.7 


55.9 


20.9 


35.0 


59.3 


20.9 


38.4 


-3.4 


1950 


205.5 


2.7 


202.8 


192.0 


10.8 


69.0 


22.5 


46.5 


61.0 


22.5 


38.5 


8.0 


1951 


224.8 


2.9 


221.9 


207.1 


14.8 


85.2 


19.1 


66.2 


79.2 


19.1 


60.1 


6.1 


1952 


236.4 


3.3 


233.1 


217.1 


16.0 


90.1 


18.3 


71.8 


93.9 


18.3 


75.6 


-3.8 


1953 


250.7 


4.0 


246.6 


229.7 


17.0 


94.6 


19.0 


75.6 


101.6 


19.0 


82.5 


-6.9 


1954 


255.7 


4.3 


251.4 


235.8 


15.6 


89.9 


21.3 


68.6 


97.0 


21.3 


75.8 


-7.1 


1955 


273.4 


4.8 


268.6 


253.7 


14.9 


101.1 


23.0 


78.1 


98.0 


23.0 


75.0 


3.1 


1956 


291.3 


5.6 


285.7 


266.0 


19.7 


109.7 


25.1 


84.6 


104.5 


25.1 


79.4 


5.2 


1957 


306.9 


5.9 


301.0 


280.4 


20.6 


116.2 


28.2 


88.0 


115.3 


28.2 


87.1 


.9 


1958.. 


317.1 


6.0 


311.1 


289.5 


21.7 


115.0 


32.6 


82.4 


127.6 


32.6 


95.0 


-12.6 


1959 


336.1 


6.5 


329.6 


310.8 


18.8 


129.4 


33.4 


96.0 


131.0 


33.4 


97.6 


-1.6 


1960 


349.4 


7.4 


342.0 


324.9 


17.1 


139.5 


36.1 


103.4 


136.4 


36.1 


100.3 


3.1 


1961 


362.9 


7.7 


355.2 


335.0 


20.2 


144.8 


40.9 


103.9 


149.1 


40.9 


108.2 


-4.3 


1962 


383.9 


8.3 


375.6 


355.2 


20.4 


156.7 


42.4 


114.3 


160.5 


42.4 


118.0 


-3.8 


1963. 


402.8 


9.4 


393.4 


374.6 


18.8 


168.5 


44.1 


124.4 


167.8 


44.1 


123.7 


.7 


1964. 


437.0 


10.5 


426.5 


400.4 


26.1 


174.0 


46.5 


127.5 


176.3 


46.5 


129.8 


-2.3 


1965.. 


472.2 


11.7 


" 460. 4 


430.2 


30.3 


188.3 


49.5 


138.9 


187.8 


49.5 


138.4 


.5 


1966. 


510.4 


12.6 


497.8 


464.8 


33.0 


212.3 


54.9 


157.4 


213.6 


54.9 


158.7 


-1.3 


1967 


544.5 


13.3 


531.2 


490.4 


40.9 


228.2 


62.2 


166.0 


242.4 


62.2 


180.2 


-14.2 


1968 


588.1 


14.1 


574.0 


535.9 


38.1 


263.4 


70.2 


193.2 


268.9 


70.2 


198.7 


-5.5 


1969 


630.4 


15.6 


614.8 


579.7 


35.1 


296.3 


77.8 


218.5 


285.6 


77.8 


207.9 


10.7 


1970 


685.9 


16.6 


669.4 


618.8 


50.6 


302.6 


93.1 


209.5 


311.9 


93.1 


218.9 


-9.4 


1971 


742.8 


17.3 


725.5 


668.2 


57.3 


322.2 


106.8 


215.5 


340.5 


106.8 


233.7 


-18.3 


1972 


801.3 


18.9 


782.4 


733.0 


49.4 


367.4 


117.8 


249.6 


370.9 


117.8 


253.1 


-3.5 


1973 


901.7 


21.5 


880.2 


809.9 


70.3 


411.2 


135.4 


275.8 


404.9 


135.4 


269.5 


6.3 


1974 


984.6 


23.4 


961.3 


889.6 


71.7 


455.1 


155.6 


299.5 


458.2 


155.6 


302.7 


-3.2 


1975 


1,086.7 


23.9 


1,062.7 


979.1 


83.6 


468.5 


194.4 


274.1 


532.8 


194.4 


338.4 


-64.4 


1976 


1,184.4 


26.1 


1,158.3 


1,090.2 


68.0 


537.2 


210.9 


326.3 


570.4 


210.9 


359.5 


-33.2 


1977 


1,303.0 


29.6 


1,273.4 


1, 206. 5 


66.9 


603.3 


227.9 


375.4 


621.8 


227.9 


394.0 


-18.6 


1978" 


1,451.2 


34.8 


1,416.4 


1, 339. 7 


76.7 


682.7 


250.0 


432.7 


684.2 


250.0 


434.2 


-1.5 



See next page for continuation of table. 



192 



Table B-8. — Gross national product: Receipts and expenditures by major 
economic groups, 1929-78 — Continued 

(Billions of dollars) 





Business 


International 


Total 
income 
or re- 
ceipts 


Statis- 
tical 
dis- 
crep- 
ancy 






Gross 
re- 
tained 
earn- 
ings* 


Gross 
pri- 
vate 
do- 
mestic 
invest- 
ment 4 


Excess 
of earn- 
ings or 
of in- 
vest- 
ment 
(-) 


Net 

trans- 
fers and 
inter- 
est 
paid to 

for- 
eigners 
(•) 


Net exports of goods 
and services 


Excess 
of 
net 
trans- 
fers 
and 
inter- 
est 
or of 
net ex- 
ports 
(-) 7 


Gross 
na- 


Year 

or 

quarter 


Ex- 
ports 


Less: 
Im- 
ports 


Equals: 
Net 
ex- 
ports 


tional 
prod- 
uct 
or ex- 
pendi- 
ture 


1929 


11.7 

3.2 

8.8 

10.9 
12.0 
14.8 
16.7 
17.7 
16.0 
15.8 
21.8 
30.0 
31.4 

30.8 
34.6 
37.1 
38.0 
41.0 
47.5 
48.7 
51.1 
51.3 
58.5 

58.7 
59.8 
67.0 
70.1 
76.2 
84.6 
91.2 
93.7 
98.2 
101.7 

101.4 
115.7 
131.0 
140.2 
137.9 
176.2 
202.6 
223.9 
243.6 


16.2 

1.4 

9.3 

13.1 

17.9 

9.9 

5.8 

7.2 

10.6 

30.7 

34.0 

45.9 

35.3 

53.8 
59.2 
52.1 
53.3 
52.7 
68.4 
71.0 
69.2 
61.9 
77.6 

76.4 
74.3 
85.2 
90.2 
96.6 
112.0 
124.5 
120.8 
131.5 
146.2 

140.8 
160.0 
188.3 
220.0 
214.6 
190.9 
243.0 
297.8 
344.5 


-4.4 

1.8 

-.5 

-2.2 

-5.8 

4.9 

10.9 

10.5 

5.4 

-14.9 

-12.1 

-15.8 

-3.8 

-23.0 
-24.6 
-15.1 
-15.3 
-11.7 
-20.8 
-22.3 
-18.1 
-10.6 
-19.0 

-17.7 
-14.5 
-18.2 
-20.1 
-20.4 
-27.4 
-33.3 
-27.1 
-33,3 
-44. ; 5 

-39.5 
-44.3 
-57.3 
-79.8 
-76.7 
-14.8 
-40.3 
-74.0 
-100.9 


0.4 

.2 

.2 

.2 

.2 

.2 

.2 

.3 

.8 

2.9 

2.6 

4.5 

5.6 

4.0 
3.5 
2.6 
2.5 
2.3 
2.5 
2.5 
2.5 
2.4 
2.6 

2.6 
2.8 
3.0 
3.1 
3.2 
3.3 
3.5 
3.7 
3.6 
3.8 

4.3 
5.5 
6.5 
7.7 
8.5 
8.5 
8.7 
9.7 
13.0 


7.0 
2.4 

4.4 

5.4 

5.9 

4.8 

4.4 

5.3 

7.2 

14.8 

19.8 

16.9 

15.9 

13.9 
18.9 
18.2 
17.1 
18.0 
20.0 
23.9 
26.7 
23.3 
23.7 

27.6 
28.9 
30.6 
32.7 
37.4 
39.5 
42.8 
45.6 
49.9 
54.7 

62.5 
65.6 
72.7 
101.6 
137.9 
147.3 
163.2 
175.5 
205.2 


5.9 

2.0 

3.4 

3.6 
4.6 
4.8 
6.5 
7.1 
7.8 
7.2 
8.2 
10.4 
9.6 

12.0 
15.1 
15.8 
16.6 
16.0 
17.8 
19.6 
20.7 
20.8 
23.2 

23.2 
23.1 
25.2 
26.4 
28.4 
32.0 
37.7 
40.6 
47.7 
52.9 

58.5 
64.0 
75.9 
94.4 
131.9 
126.9 
155.7 
186.6 
217.0 


1.1 

.4 

1.1 

1.7 

1.3 

.0 

-2.0 

-1.8 

-.6 

7.6 

11.6 

6.5 

6.2 

1.9 
3.8 
2.4 

.6 
2.0 
2.2 
4.3 
6.1 
2.5 

.6 

4.4 
5.8 
5.4 
6.3 
8.9 
7.6 
5.1 
4.9 
2.3 
1.8 

3.9 

1.6 

-3.3 

7.1 

6.0 

20.4 

7.4 

-11.1 

-11.8 


-0.7 

-.2 

-.9 

-1.5 

-1.1 

.2 

2.2 

2.1 

1.4 

-4.6 

-9.0 

-2.0 

-.6 

2.1 

-.3 

.2 

1.9 

.3 

.3 

-1.8 

-3.6 

-.1 

2.0 

-1.7 
-3.0 
-2.4 
-3.2 
-5.7 
-4.3 
-1.6 
-1.2 
1.4 
2.0 

.3 

3.9 

9.8 

.6 

2.5 

-11.9 

1.2 

20.9 

24.8 


102.3 

55.1 

89.4 

98.9 
124.3 
159.1 
193.8 
207.8 
208.2 
208.9 
231.0 
260.3 
257.0 

284.1 
326.2 
344.5 
362.8 
363.3 
396.8 
421.5 
442.6 
447.2 
486.7 

506.7 
521.7 
559.8 
591.0 
633.5 
687.2 
749.8 
794.6 
869.1 
938.8 

984.5 
1,062.1 
1,169.4 
1,303.9 
1, 407. 1 
1,521.5 
1,695.9 
1, 882. 4 
2,105.7 


1.1 

.7 

1.4 

1.1 

.5 

-.8 

-1.8 

2.7 

4.1 

.7 

1.8 

-1.2 

1.0 

2.0 
4.0 
2.7 
3.3 
3.0 
2.5 

-.8 
.2 
1.7 

-.2 

-.7 
1.6 
4.0 
3.7 
2.2 
.9 
3.2 
1.7 

-.6 
-3.3 

-2.1 
1.3 
1.7 

2.6 
5.8 

7.4 
4.2 
4.7 
.9 


103 4 


1933 


55 8 


1939 

1940 


90.8 
100 


1941 


124 9 


1942 

1943. 

1944 


158.3 
192.0 
210 5 


1945 


212 3 


1946 


209 6 


1947. 


232 8 


1948 


259 1 


1949 

1950 


258.0 
286 2 


1951 


330 2 


1952 


347.2 


1953 


366 1 


1954 


366 3 


1955 


399 3 


1963 


420.7 
442.8 
448.9 
486.5 

506.0 
523.3 
563.8 
594.7 


1964 


635.7 


1965 


688.1 


1966 


753.0 


1967 


796.3 


1968 


868.5 


1969 


935.5 


1970 


982.4 


1971 


1,063.4 


1972 


1,171.1 


1973 


1,306.6 


1974 


1,412.9 


1975 


1,528.8 


1976 


1, 700. 1 


1977 .... 


1,887.2 


1978 p 


2, 106. 6 



1 Personal income less personal tax and nontax payments (fines, penalties, etc.). 
1 Interest paid by consumers to business and net personal transfer payments to foreigners. 

' Government transfer payments to persons and foreigners, net interest paid by government, subsidies less current 
surplus of government enterprises, and disbursements less wage accruals. 

* Undistributed corporate profits with inventory valuation and capital consumption adjustments, corporate and non- 
corporate capital consumption allowances with capital consumption adjustment, and private wage accruals less 
disbursements. 

•See Table B-14. 

* Net transfers to foreigners by persons and government and interest paid by government to foreigners. 
7 Capital grants received by the United States (net) less net foreign investment. 

Source: Department of Commerce, Bureau of Economic Analysis. 



193 



Table B-9. — Gross national product by sector, 1929-78 
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates] 





Gross 
national 
product 


Gross domestic product 


Rest 
of the 
world 


Percent 




Total 


Business 


House- 
holds 
and 
insti- 
tutions 


Government > 


change 

from 

preced- 


Year or quarter 


Total 


Non- 
farm ' 


Farm 


Sta- 
tis- 
tical 
dis- 
crep- 
ancy 


Total 


Fed- 
eral 


State 
and 
local 


ing 
period, 
gross 
domes- 
tic 
prod- 
uct 3 


1929 


103.4 

55.8 

90.8 

100.0 
124.9 
158.3 
192.0 
210.5 
212.3 
209.6 
232.8 
259.1 
258.0 

286.2 
330.2 
347.2 
366.1 
366.3 
399.3 
420.7 
442.8 
448.9 
486.5 

506.0 
523.3 
563.8 
594.7 
635.7 
688.1 
753.0 
796.3 
868.5 
935.5 

982.4 
1, 063. 4 
1,171.1 
1,306.6 
1,412.9 
1, 528. 8 
1, 700. 1 
1, 887. 2 
2, 106. 6 

1, 649. 7 
1,685.4 
1,715.6 
1,749.8 

1, 806. 8 
1,867.0 
1,916.8 
1, 958. 1 

1, 992. 

2, 087. 5 
2, 136. 1 
2,210.8 


102.6 

55.5 

90.5 

99.6 
124.5 
157.9 
191.6 
210.1 
212.0 
209.0 
231.8 
257.9 
256.9 

284.8 
328.7 
345.7 
364.6 
364.5 
397.3 
418.5 
440.5 
446.6 
484.0 

503.5 
520.2 
560.2 
591.1 
631.4 
683.4 
748.8 
791.8 
863.7 
931.1 

977.8 
1, 056. 8 
1, 164. 1 
1, 297. 5 
1, 399. 8 
1,518.3 
1, 685. 7 

1, 869. 9 

2, 087. 1 

1,635.3 
1,671.9 
1, 700. 7 
1,734.9 

1, 789. 7 
1,849.0 
1, 898. 7 

1, 942. 2 

1,973.8 

2, 066. 5 
2,117.3 
2, 190. 8 


95.4 

49.1 

80.6 

89.4 
112.6 
139.9 
162.8 
174.2 
172.8 
183.8 
210.0 
234.9 
231.5 

257.5 
294.4 
307.3 
324.9 
323.9 
354.0 
372.1 
390.8 
393.1 
427.7 

442.5 
455.3 
490.4 
516.5 
550.7 
596.6 
651.1 
682.7 
742.2 
798.1 

«, 831.5 
896.9 
989.5 
1,108.0 
1, 193. 7 
1, 289. 2 
1, 436. 7 
1, 599. 3 
1, 789. 1 

1, 392. 8 
1, 425. 4 
1, 450. 7 
1, 478. 1 

1,527.8 
1, 582. 5 
1, 626. 4 
1,660.4 

1, 684. 1 
1,771.8 
1,817.5 
1, 883. 1 


84.7 

43.8 

72.9 

81.8 
103.1 
127.7 
149.3 
156.2 
152.7 
164.2 
188.0 
212.7 
211.7 

235.5 
267.4 
282.5 
301.2 
301.3 
332.8 
354.3 
372.3 
370.7 
408.9 

423.0 
433.4 
465.9 
492.2 
529.2 
573.8 
625.0 
658.8 
720.2 
776.2 

807.6 
867.9 
955.8 
1, 055. 2 
1,139.9 
1, 232. 6 
1, 385. 6 
1,544.0 
1,730.5 

1, 340. 9 
1, 373. 5 
1,401.0 
1, 427. 1 

1,474.9 
1, 528. 
1,571.6 
1,601.6 

1,628.9 
1,714.9 
1, 758. 5 


9.7 

4.6 

6.3 

6.5 
8.9 
13.0 
15.3 
15.' 3 
16.0 
18.9 
20.2 
23.3 
18.8 

20.0 
22.9 
22.2 
20.3 
19.6 
18.8 
18.6 
18.4 
20.7 
19.1 

20.2 
20.2 
20.5 
20.5 
19.3 
22.0 
22.9 
22.2 
22.6 
25.2 

25.9 
27.7 
32.0 
50.1 
48.0 
49.2 
46.9 
50.5 
57.8 

48.5 
47.8 
45.7 
45.6 

49.5 
50.8 
47.7 
54.0 

53.0 
56.4 
58.6 
63.0 


1.1 
.7 

1.4 

1.1 

.5 

-.8 

-1.8 

2.7 

4.1 

.7 

1.8 

-1.2 

1.0 

2.0 
4.0 
2.7 
3.3 
3.0 
2.5 

-.8 
.2 
1.7 

-.2 

-.7 
1.6 
4.0 
3.7 
2.2 
.9 
3.2 
1.7 

-.6 
-3.3 

-2.1 
1.3 
1.7 
2.6 
5.8 
7.4 
4.2 
4.7 
.9 

3.4 
4.1 
4.0 
5.3 

3.4 
3.7 
7.1 
4.8 

2.2 
.5 
.4 


2.9 

1.7 

2.3 

2.4 
2.5 
2.9 
3.2 
3.7 
4.1 
4.5 
5.1 
5.6 
5.9 

6.4 
6.9 
7.2 
7.8 
8.1 
9.1 
9.8 
10.5 
11.4 
12.3 

13.8 
14.4 
15.5 
16.6 
17.8 
19.2 
21.1 
23.9 
26.4 
29.2 

31.6 
34.7 
37.2 
40.5 
44.8 
50.5 
56.5 
62.7 
71.5 

54.2 
55.9 
57.0 
58.9 

60.0 
61.3 
63.5 
65.9 

68.8 
70.5 
72.3 
74.4 


4.3 

4.7 

7.6 

7.8 
9.4 
15.1 
25.6 
32.2 
35.2 
20.8 
16.7 
17.4 
19.4 

20.9 
27.4 
31.2 
31.9 
32.5 
34.2 
36.6 
39.1 
42.1 
44.0 

47.1 
50.5 
54.3 
58.0 
62.9 
67.6 
76.5 
85.1 
95.2 
103.7 

114.7 
125.2 
137.4 
149.1 
161.4 
178.6 
192.5 
208.0 
226.5 

188.3 
190.7 
193.0 
197.9 

201.9 
205.2 
208.9 
215.9 

221.0 
224.1 
227.5 
233.4 


0.9 

1.2 

3.4 

3.5 
5.0 
10.6 
20.9 
27.2 
29.8 
14.6 
9.4 
8.9 
10.0 

10.7 
16.2 
18.9 
18.6 
17.8 
18.4 
19.0 
19.6 
20.5 
20.9 

21.7 
22.6 
24.1 
25.2 
27.0 
28.3 
32.4 
35.6 
39.3 
41.8 

44.7 
46.8 
50.1 
51.9 
54.9 
59.0 
62.4 
66.4 
71.1 

61.5 
61.6 
61.8 
64.6 

65.2 
65.4 
65.7 
69.5 

69.9 
70.1 
70.5 
74.0 


3.5 

3.5 

4.2 

4.3 
4.4 
4.5 
4.7 
4.9 
5.4 
6.2 
7.3 
8.5 
9.4 

10.1 
11.2 
12.3 
13.3 
14.7 
15.8 
17.6 
19.6 
21.6 
23.1 

25.5 
27.9 
30.2 
32.9 
35.9 
39.3 
44.1 
49.5 
55.9 
61.9 

70.0 
78.5 
87.3 
97.1 
106.5 
119.6 
130.1 
141.5 
155.4 

126.8 
129.1 
131.2 
133.3 

136.8 
139.8 
143.2 
146.4 

151.1 
154. 1 
157.0 
159.4 


0.8 

.3 

.3 

.4 
.4 
.4 
.3 
.4 
.3 
.5 
.9 
1.2 
1.1 

1.3 
1.5 
1.5 
1.5 
1.8 
2.0 
2.2 
2.3 
2.2 
2.4 

2.5 
3.1 
3.6 
3.7 
4.3 
4.7 
4.2 
4.6 
4.8 
4.5 

4.6 
6.6 
7.0 
9.1 
13.1 
10.5 
14.4 
17.3 
19.5 

14.4 
13.5 
14.9 
14.9 

17.1 
18.0 
18.1 
15.9 

18.2 
21.1 
18.8 
20.0 




1933 


-4.1 


1939 


7.0 


1940 


10.1 


1941 


25.0 


1942 


26.8 


1943 


21.4 


1944 


9.6 


1945 


.9 


1946 


-1.4 


1947 


10.9 


1948 


11.3 


1349 


-.4 


1950 

1951 

1952 


10.9 
15.4 
5.2 


1953 


5.5 


1954 

1955 


-.0 
9.0 


1956 


5.3 


1957 


5.2 


1958 


1.4 


1959 


8.4 


1960 


4.0 


1961 


3.3 


1962 


7.7 


1963 


5.5 


1964. 


6.8 


1965 


8.2 


1966 


9.6 


1967 


5.7 


1968 


9.1 


1969 


7.8 


1970 


5.0 


1971 


8.1 


1972 


10.1 


1973 


11.5 


1974 


7.9 


1975.... 


8.5 


1976 ... 


11.0 


1977... 


10.9 


1978 " 


11.6 


1976:1 

II 

III 
IV 

1977: 1 

II 

Ill 

IV 

1978: 1 

II 

III 

IV" 


12.7 
9.3 
7.1 
8.3 

13.3 
13.9 
11.2 
9.5 

6.7 
20.1 
10.2 
14.6 



1 Includes compensation of employees in government enterprises. 
* Compensation of government employees. 

3 Changes are based on unrounded data and therefore may differ slightly from those obtained from data shown here. 
See Table B-l for percent changes in gross national product. 

Source: Department of Commerce, Bureau of Economic Analysis. 



194 



Table B-10. — Gross national product by sector in 7972 dollars, 1929-78 
[Billions of 1972 dollars, except as noted; quarterly data at seasonally adjusted annual rates] 





Gross 
national 
product 


Gross domestic product 


Rest 
Df the 

world 


Percent 
change 


Year or quarter 


Total 


Business 

\ 


ouse- 

holds 

and 

nsti- 

utions 


Government 3 


from 
preced- 
ing 




Total 


Non- 
farm ' 


F 
Farm 


esid- 
ual - 

t 


Total 


Fed- 
eral 


State 
and 
local 


period, 

gross 

domestic 

product * 


1929 


314.6 

222.1 

318.8 

343.3 
398.5 
460.3 
530.6 
568.6 
560.0 
476.9 
468.3 
487.7 
490.7 

533.5 
576.5 
598.5 
621.8 
613.7 
654.8 
668.8 
680.9 
679.5 
720.4 

736.8 

755.3 

799.1 

830.7 

874.4 

925.9 

981.0 

1,007.7 

1,051.8 

1, 078. 8 

1,075.3 
1, 107. 5 
1,171.1 

1. 235. 
1,217.8 
1, 202. 3 
1,271.0 
1,332.7 

1. 385. 1 

1, 255. 5 
1, 268. 
1, 276. 5 
1, 284. 

1, 306. 7 
1, 325. 5 
1,343.9 
1,354.5 

1,354.2 
1,382.6 
1,391.4 
1,412.2 


312.8 

220.5 

317.7 

342.0 
397.2 
459.2 
529.7 
567.5 
559.2 
475.8 
466.7 
485.9 
488.8 

531.5 
574.7 
596.7 
619.9 
611.4 
652.2 
666.1 
678.0 
676.5 
717.3 

733.6 

751.2 

794.3 

825.8 

868.7 

919.9 

975.6 

1,001.9 

1, 045. 7 

1, 073. 1 

1, 069. 8 
1, 100. 3 
1, 164. 1 
1, 227. 4 
1,211.0 
1,197.5 
1, 264. 3 

1. 325. 3 
1,377.2 

1. 248. 6 
1,261.6 

1. 269. 7 
1,277.1 

1. 299. 4 
1,317.7 
1, 336. 3 
1,347.9 

1,346.6 
1, 373. 9 
1, 383. 9 
1, 404. 4 


271.1 

179.7 

260.6 

282.0 
326.3 
361.0 
385.2 
403.5 
397.9 
384.9 
392.8 
411.2 
409.4 

448.6 
477.2 
492.8 
515.6 
508.0 
546.5 
557.2 
566.0 
561.9 
600.5 

611.8 
625.6 
663.9 
692.0 
730.4 
776.4 
822.4 
839.8 
878.2 
901.5 

898.3 
927.6 
989.5 
1, 050. 4 
1,031.2 
1,013.6 
1,077.9 
1, 135. 9 
1, 183. 1 

1,063.0 
1 075.3 
1,083.4 

1. 090. 

1,112.1 
1,129.6 

1. 146. 1 
1,155.9 

1, 153. 5 
1, 180. 
1, 189. 3 
1,209.5 


244.2 

152.1 

230.7 

253.8 
299.1 
336.0 
363.9 
372.7 
366.4 
362.2 
370.8 
387.2 
382.1 

417.9 
445.9 
460.7 
480.6 
473.4 
512.5 
529.3 
538.7 
528.2 
569.6 

580.5 
590.9 
629.6 
658.4 
697.1 
746.7 
791.1 
807.8 
850.6 
877.4 

871.3 
894.9 
955.8 
1,013.2 
993.7 
975.3 

1. 040. 1 

1. 094. 2 
1, 146. 

1, 025. 5 
1,039.6 
1,045.7 
1,049.6 

1, 072. 7 
1, 088. 9 
1, 102. 6 
1,112.4 

1,115.4 
1,145.2 
1,151.8 
1,171.5 


23.8 

25.0 

25.3 

24.7 
26.3 
28.7 
27.8 
27.3 
25.8 
25.8 
23.9 
25.7 
25.5 

26.9 
25.8 
26.3 
27.6 
28.3 
29.2 
28.8 
28.1 
29.3 
28.2 

29.5 
29.6 
29.5 
30.0 
29.2 
30.1 
28.5 
29.6 
29.4 
29.9 

31.1 

32.8 
32.0 
32.3 
32.2 
33.7 
32.2 
34.4 
32.5 

34.1 
30.5 
31.5 
32.6 

32.9 
34.1 
34.5 
36.1 

32.5 
30.5 
33.2 
33.7 


3.1 
2.6 
4.7 

3.6 

.9 

-3.8 

-6.6 

3.5 

5.8 
-3.0 
-1.9 
-1.7 

1.8 

3.8 
5.5 
5.7 
7.3 
6.2 
4.8 
-.9 
-.8 
4.4 
2.7 

1.8 
5.1 
4.8 
3.6 
4.0 
-.4 
2.8 
2.4 
-1.8 
-5.9 

-4.2 
-.1 
1.7 
4.9 
5.3 
4.7 
5.6 
7.3 
4.6 

3.4 
5.2 
6.2 
7.8 

6.4 
6.6 
9.0 
7.4 

5.5 
4.3 
4.3 
4.3 


15.6 

12.2 

15.1 

16.1 
15.9 
16.4 
15.2 
15.1 
15.0 
15.1 
16.0 
16.7 
17.3 

18.3 
18.7 
18.6 
19.3 
19.4 
21.4 
22.5 
23.1 
24.2 
24.9 

26.8 
27.2 
28.3 
29.0 
29.9 
31.1 
32.8 
34.8 
35.9 
36.6 

36.3 
36.6 
37.2 
38.1 
38.0 
39.4 
40.7 
42.2 
44.6 

40.2 
40.7 
40.6 
41.3 

41.2 
41.7 
42.5 
43.6 

43.8 
44.3 
44.9 
45.3 


26.1 

28.7 

42.0 

43.9 

55.1 

81.8 

29.3 1 

49.0 1 

46.2 1 

75.8 

57.9 

58.0 

62.2 

64.6 
78.8 
85.3 
85.0 
83.9 
84.4 
86.5 
88.9 
90.4 
91.8 

94.9 
98.5 
102.1 
104.8 
108.4 
112.4 
120.4 
127.2 
131.7 
135.0 

135.2 
136.0 
137.4 
138.9 
141.9 
144.4 
145.6 
147.2 
149.6 

145.4 
145.6 
145.7 
145.8 

146.1 
146.3 
147.7 
148.4 

149.4 
149.6 
149.8 
149.6 


5.2 

6.6 

16.9 

18.6 
29.6 
56.7 
05.0 
25.2 
21.8 
49.7 
29.8 
29.2 
31.3 

32.7 
46.2 
51.6 
49.6 
47.2 
45.9 
45.6 
45.8 
44.5 
44.5 

45.2 
46.2 
48.3 
48.2 
48.5 
48.7 
53.0 
57.2 
58.1 
58.2 

55.2 
52.5 
50.1 
48.3 
48.6 
48.5 
48.5 
48.7 
48.9 

48.3 
48.4 
48.6 
48.6 

48.6 
48.7 
48.8 
48.8 

48.8 
48.8 
49.0 
48.9 


20.9 

22.0 

25.1 

25.3 
25.5 
25.0 
24.4 
23.8 
24.5 
26.1 
28.1 
28.8 
30.9 

31.9 
32.6 
33.7 
35.5 
36.7 
38.4 
40.8 
43.1 
45.8 
47.3 

49.7 
52.3 
53.9 
56.6 
60.0 
63.6 
67.5 
70.0 
73.6 
76.8 

80.1 
83.5 
87.3 
90.6 
93.3 
96.0 
97.1 
98.4 
100.7 

97.0 
97.1 
97.1 
97.1 

97.5 
97.6 
99.0 
99.6 

100.6 
100.8 
100.8 
100.7 


1.9 

1.6 

1.2 

1.3 
1.2 
1.1 
1.0 
1.0 
.8 
1.1 
1.6 
1.8 
1.9 

1.9 
1.8 
1.8 
2.0 
2.3 
2.5 
2.7 
2.9 
3.0 
3.2 

3.2 
4.1 
4.8 
4.9 
5.7 
6.1 
5.4 
5.8 
6.1 
5.7 

5.5 
7.2 
7.0 
7.6 
6.8 
4.9 
6.8 
7.3 
7.9 

7.0 
6.4 
6.8 
6.8 

7.4 
7.8 
7.6 
6.6 

7.5 
8.8 
7.5 
7.8 




1933 


-2.2 


1939 


7.7 


1940 


7.7 


1941 


16.1 


1942 


15.6 


1943 - 


15.4 


1944 


7.2 


1945 


-1.5 


1946 - 


-14.9 


1947 


-1.9 


1948 


4.1 


1949 


.6 


1950 


8.7 


1951 


8.1 


1952 


3.8 


1953 . 


3.9 


1954 


-1.4 


1955 


6.7 


1956 


2.1 


1957 


1.8 


1958 


-.2 


1959 


6.0 


I960 


2.3 


1961 


2.4 


1962 — 


5.7 


1963 ___ 


4.0 


1964 ... 


5.2 


1965 


5.9 


1966 .-- 


6.1 


1967.. 


2.7 


1968 


4.4 


1969 


2.6 


1970 


-.3 


1971 


2.8 


1972 


5.8 


1973 


5.4 


1974 


-1.3 


1975 


-1.1 


1976-.- 


5.6 


1977-- - 


4.8 


1978 » 


3.9 


1976: 1 - 


8.7 


II 

Ill 

IV 

1977: 1 


4.2 
2.6 
2.4 

7.1 


II 


5.8 


III 

IV 

1978: 1 


5.8 
3.5 

-.4 


II 


8.3 


Ill 

IV » 


3.0 
6.1 



1 Includes compensation of employees in government enterprises. 

1 The difference between gross product in 1972 dollars measured as the sum of final products and that measured as the 
sum of gross product by industry. 

1 Compensation of government employees. 

4 Changes are based on unrounded data and therefore may differ slightly from those obtained from data shown here. 
See Table B-2 for percent changes in gross national product in 1972 dollars. 

Source: Department of Commerce, Bureau of Economic Analysis. 



195 



Table B-l 1 .-^-Gross domestic product oj nonfinancial corporate business, J 929- 78 
[Billions of dollars; quarterly data at seasonally adjusted annual rates] 





Gross 
do- 
mes- 
tic 
prod- 
uct 
of 

non- 
finan- 
cial 
cor- 
po- 
rate 
busi- 
ness 


Cap- 
ital 
con- 
sump- 
tion 
allow- 
ances 
with 
capi- 
tal 
con- 
sump- 
tion 
ad- 
just- 
ment 


Net domestic product 




Total 


Indi- 
rect 
busi- 
ness 
tax, 
etc.« 


Domestic income 


Year 


Total 


Com- 
pen- 
sation 
of 
em- 
ploy- 
ees 


Corporate profits with inventory valuation and capital 
consumption adjustments 




or 
quar- 


Total 


Profits before tax 


Inven- 
tory 
valu- 
ation 
ad- 
just- 
ment 


Capi- 
tal 
con- 
sump- 
tion 
ad- 
just- 
ment 




ter 


Total 


Profits 
tax 

liabil- 
ity 


Profits after tax 


Net 
inter- 
est 




Total 


Divi- 
dends 


Undis- 
tribu- 
ted 
profits 




1929.. 

1933.. 

1939.. 

1940.. 
1941.. 
1942.. 
1943.. 
1944.. 
1945.. 
1946.. 
1947.. 
1948. . 
1949.. 

1950.. 
1951.. 
1952.. 
1953.. 
1954.. 
1955.. 
1956.. 
1957.. 
1958.. 
1959.. 

I960.. 
1961.. 
1962.. 
1963.. 
1964.. 
1965.. 
1966.. 
1967.. 
1968.. 
1969.. 

1970.. 
1971.. 
1972.. 
1973.. 
1974.. 
1975.. 
1976.. 
1977.. 
1978". 

1976: 

re. 

III.. 

IV.. 

1977: 
1... 
II... 
III.. 
IV.. 

1978: 
1... 
II... 
III.. 


50.1 

24.4 

43.7 

50.4 
65.6 
82. S 
98.7 
102.1 
95.3 
99.3 
120.0 
137.3 
133.5 

151. S 
174.5 
182.3 
195. C 
191.9 
216.7 
231.6 
242.3 
236.3 
265.7 

277.3 
284. 5 
311.0 
330.9 
357.6 
392.1 
430.7 
452.9 
498.4 
541.8 

560.6 
602.5 
671.0 
752.0 
808.8 
874.1 
988.5 

1. 103. 2 
1,240.5 

959.4 

982.0 

999.3 

1,013.1 

1,048.5 
1, 093. 3 
1,124.6 

1. 146. 3 

1,161.6 
1, 233. 
1,260.6 


5.4 

4.2 

4.7 

4.8 
5.3 
6.0 
6.1 
6.2 
6.4 
7.3 
9.1 
10.7 
11.6 

12.6 
14.6 
15.7 
17.0 
17.9 
19.2 
21.5 
23.7 
24.9 
26.0 

27.0 
27.8 
28.7 
29.8 
31.0 
32.8 
35.7 
39.3 
43.0 
47.8 

53.1 
58.2 
62.6 
68.7 
80.8 
96.8 
106.7 
115.6 
126.5 

103.6 
105.4 
107.7 
109.9 

111.5 
114.6 
117.2 
119.0 

121.6 
124.6 
128.6 


44.7 

20.2 

39.1 

45.6 
60.4 
77.0 
92.6 
95.9 
88.9 
92.1 
110.9 
126.5 
121.9 

139.3 
159.9 
166.7 
178.1 
174.1 
197.5 
210.1 
218.5 
211.4 
239.7 

250.3 
256.7 
282.3 
301.1 
326.6 
359.3 
394.9 
413.6 
455.4 
494.0 

507.5 
544.2 
608.4 
683.3 
728.0 
777.3 
881.8 
987.6 
1,114.0 

855.8 
876.6 
891.6 
903.2 

936.9 

978.7 

1,007.4 

1, 027. 3 

1, 040. 
1, 108. 5 
1,132.0 


3.4 

3.8 

5.1 

5.5 
6.4 
6.8 
7.3 
8.1 
8.9 
10.1 
11.2 
12.1 
12.6 

14.1 
15.2 
16.8 
18.2 
17.4 
19.2 
20.8 
22.4 
22.8 
25.4 

28.3 
30.1 
33.0 
35.6 
38.4 
41.1 
42.9 
45.8 
51.6 
57.1 

61.8 
68.2 
73.5 
80.5 
85.7 
92.6 
99.5 
107.8 
117.9 

96.4 
98.9 
100.5 
102.5 

104.8 
106.8 
108.7 
110.9 

113.5 
118.0 
118.4 


41.3 

16.4 

34.0 

40.1 
53.9 
70.1 
85.3 
87.8 
80.0 
81.9 
99.8 
114.4 
109.3 

125.2 
144.7 
149.8 
159.9 
156.6 
178.3 
189.2 
196.2 
188.6 
214.4 

222.0 
226.5 
249.2 
265.6 
288.3 
318.2 
352.0 
367.9 
403.8 
437.0 

445.7 
476.0 
534.8 
602.8 
642.3 
684.6 
782.2 
879.8 
996.1 

759.4 
777.7 
791.1 
800.7 

832.1 
871.9 
898.7 
916.4 

926.5 
990.5 
1,013.6 


32.3 

16.7 

28.2 

31.2 
39.8 
51.0 
62.2 
65.1 
61.9 
67.2 
79.1 
87.8 
85.3 

94.7 
110.2 
118.3 
128.7 
126.5 
138.5 
151.4 
159.1 
155.9 
171.6 

181.1 
185.1 
199.8 
210.7 
226.3 
246.1 
273.5 
291.9 
321.6 
357.4 

377.1 
399.4 
443.8 
503.8 
552.9 
576.9 
650.2 
732.1 
833.9 

626.3 
642.9 
656.9 
674.8 

699.5 
725.3 
741.6 
762.2 

789.9 
826.0 
845.5 


7.6 

-2.0 

4.3 

7.5 
12.8 
17.9 
22.0 
21.7 
17.2 
14.1 
19.9 
25.8 
23.0 

29.6 
33.4 
30.3 
29.9 
28.6 
38.2 
36.1 
35.0 
30.1 
39.7 

37.4 
37.4 
44.9 
50.0 
56.7 
66.1 
71.2 
67.2 
72.1 
66.4 

51.6 
58.7 
72.0 
76.0 
59.5 
76.9 
101.3 
113.9 
125.1 

102.2 
104.2 
103.6 
95.3 

100.6 
113.5 
122.8 
118.7 

100.9 
127.8 
130.6 


8.4 

.6 

6.1 

8.8 
16.4 
20.1 
23.6 
22.2 
17.8 
22.0 
29.1 
31.8 
24.9 

38.5 
39.1 
33.8 
34.9 
32.1 
42.0 
41.8 
39.8 
33.7 
43.1 

39.5 
39.2 
43.7 
48.3 
54.6 
64.4 
69.5 
65.4 
71.9 
68.4 

55.1 
63.3 
75.9 
92.7 
102.9 
101.3 
130.2 
143.5 
167.0 

127.8 
134.1 
131.4 
127.3 

135.4 
144.7 
145.3 
148.5 

140.0 
169.5 
170.3 


1.2 

.5 
1.4 

2.7 

7.5 
11.2 
13.8 
12.6 
10.2 

8.6 
10.8 
11.8 

9.3 

16.9 
21.2 
17.8 
18.5 
15.6 
20.2 
20.1 
19.1 
16.2 
20.7 

19.2 
19.5 
20.6 
22.8 
24.0 
27.2 
29.5 
27.7 
33.6 
33.3 

27.3 
29.9 
33.5 
39.6 
42.7 
40.6 
53.0 
59.0 
68.6 

53.1 
55.3 
53.1 
50.4 

56.1 
59.9 
59.4 
60.4 

55.9 
70.1 
70.2 


7.3 

.1 

4.7 

6.1 
9.0 
8.9 
9.8 
9.6 
7.6 
13.4 
18.3 
20.0 
15.6 

21.6 
17.9 
16.0 
16.4 
16.4 
21.8 
21.8 
20.7 
17.5 
22.3 

20.3 
19.7 
23.1 
25.5 
30.7 
37.2 
40.0 
37.7 
38.3 
35.1 

27.9 
33.3 
42.4 
53.1 
60.2 
60.7 
77.2 
84.5 
98.4 

74.8 
78.8 
78.3 
76.9 

79.3 
84.8 
85.9 
88.0 

84.2 
99.4 
100.1 


5.2 

2.0 

3.3 

3.6 
4.0 
3.8 
4.0 
4.2 
4.2 
5.1 
5.9 
6.5 
6.5 

7.9 
7.8 
7.8 
8.0 
8.2 
9.4 
10.1 
10.4 
10.2 
10.8 

11.5 
11.7 
12.7 
14.1 
15.3 
17.2 
18.1 
18.9 
20.7 
20.7 

19.9 

20.0 
21.7 
23.9 
26.0 
28.5 
33.5 
39.1 
45.0 

28.7 
33.2 
34.4 
37.9 

36.4 
37.9 
39.5 
42.5 

43.0 
42.9 
46.2 


2.0 

-1.9 

1.4 

2.5 
4.9 
5.1 
5.7 
5.4 
3.4 
8.3 
12.4 
13.5 
9.1 

13.6 
10.1 
8.1 
8.4 
8.2 
12.4 
11.6 
10.3 
7.3 
11.5 

8.7 
8.0 
10.3 
11.4 
15.4 
20.0 
21.9 
18.8 
17.6 
14.4 

8.0 
13.3 
20.7 
29.2 
34.2 
32.2 
43.7 
45.5 
53.5 

46.1 
45.6 
43.9 
39.0 

43.0 
46.9 
46.4 
45.6 

41.2 
56.5 
53.9 


0.5 

-2.1 

-.7 

-.2 

-2.5 

-1.2 

-.8 

-.3 

-.6 

-5.3 

-5.9 

-2.2 

1.9 

-5.0 

-1.2 

1.0 

-1.0 

-.3 

-1.7 

-2.7 

-1.5 

-.3 

-.5 

.3 

.1 

.1 

-.2 

-.5 

-1.9 

-2.1 

-1.7 

-3.4 

-5.5 

-5.1 
-5.0 
-6.6 
-18.6 
-40.4 
-12.4 
-14.5 
-14.8 
-24.3 

-11.4 
-15.7 
-13.3 
-17.6 

-20.3 
-16.6 
-7.7 
-14.8 

-23.5 
-24.9 
-20.9 


-1.3 

-.5 

-1.0 

-1.1 

-1.1 

-1.0 

-.8 

-.2 

-. 1 

-2.7 

-3.3 

-3.9 

-3.8 

-3.9 
-4.5 
-4.4 
-4.0 
-3.2 
-2.1 
-3.0 
-3.3 
-3.4 
-2.9 

-2.3 
-1.8 
1.0 
1.9 
2.6 
3.6 
3.8 
3.6 
3.6 
3.5 

1.5 

.5 

2.7 

1.8 

-3.0 

-11.9 

-14.3 

-14.7 

-17.7 

-14.2 
-14.3 
-14.4 
-14.4 

-14.5 
-14.7 
-14.8 
-15.0 

-15.7 
-16.8 
-18.9 


1.4 

1.7 

1.5 

1.4 
1.3 
1.3 
1.1 
1.0 
1.0 
.7 
.8 
.9 
1,0 

.9 
1.1 
1.2 
1.3 
1.6 
1.6 
1.7 
2.2 
2.7 
3.1 

3.5 
3.9 
4.5 
4.8 
5 3 

e.i 

7.4 
8.7 
10.1 
13.1 

17.0 
17.9 
19.1 
23.1 
29.9 
30.8 
30.7 
33.7 
37.2 

30.9 
30.7 
30.5 
30.6 

32.0 
33.2 
34.4 
35.4 

35.7 
36.6 
37.6 



1 Indirect business tax and nontax liability plus business transfer payments less subsidies. 
Source : Department of Commerce, Bureau of Economic Analysis. 



196 



Table B-12. — Output, costs, and profits of nonfinancial corporate business, 1948-78 
[Quarterly data at seasonally adjusted annual rates] 



Gross domestic 

product of 

nonfinancial 

corporate 

business 

(billions of 

dollars) 



Cur- 
rent 
dollars 



1976: l.„. 



137.3 
133.5 

151.9 
174.5 
182.3 
195.0 
191.9 

216.7 
231.6 
242.3 
236.3 
265.7 

277.3 
284.5 
311.0 
330.9 
357.6 

392.1 
430.7 
452.9 
498.4 
541.8 

560.6 
602.5 
671.0 
752.0 



874.1 

988.5 

1,103.2 

1,240.5 

959.4 

982.0 

999.3 

1,013.1 

1, 048. 5 
1, 093. 3 
1,124.6 
1,146.3 

1,161.6 
1,233.0 
1, 260. 6 



Current-dollar cost and profit per unit of output (dollars)' 



1972 
dollars 



229.7 
219.9 

247.5 
270.2 
275.2 
292.0 
283.5 

315.1 
324.1 
328.3 
313.4 
347.3 

358.9 
366.7 
399.7 
425.4 
455.2 

494.6 
532.9 
545.8 
581.6 
607.3 

600.6 
619.3 
671.0 
720.4 
695.0 

680.0 
730.0 
769.3 
810.3 

722.1 
731.7 
733.5 
732.7 

750.2 
766.9 
776.7 
783.6 

783.6 
811.9 
814.9 



Total 

cost 

and 

profit 2 



0.598 
.607 

.614 

.646 
.663 
.668 
.677 



.715 
.738 
.754 
.765 

.773 
.776 
.778 
.778 
.786 

.793 
.808 
.830 
.857 
.892 

.933 
.973 
1.000 
1.C44 
1.164 

1.285 
1.354 
1.434 
1.531 

1.329 
1.342 
1.362 
1.383 

1.398 
1.426 
1.448 
1.463 

1.482 
1.519 
1.547 



Capital 
con- 
sump- 
tion 
allow- 
ances 
with 
capital 
con- 
sump- 
tion 
adjust- 
ment 



0.047 
.053 

.051 
.054 
.057 
.058 
.063 

.061 
.066 
.072 
.080 
.075 

.075 
.076 
.072 
.070 
.068 

.066 
.067 
.072 
.074 
.079 



.094 
.093 
.095 
.116 

.142 
.146 
.150 
.156 

.143 
.144 
.147 
.150 

.149 
.149 
.151 
,152 

.155 
.153 
.158 



In- 


Com- 


direct 


pen- 


busi- 


sation 


ness 


of 


tax, 


em- 


etc.' 


ployees 



0.053 
.057 

.057 
.056 
.061 
.062 
.061 

.061 
.064 
.068 
.073 
.073 

.079 

.082 
.083 
.084 
.084 

.083 
.080 
.084 
.089 
.094 

.103 
.110 
.110 
.112 
.123 

.136 
.136 
.140 
.145 

.133 

.135 
.137 
.140 

.140 
.139 
.140 
.142 

.145 
.145 
.145 



0.382 
.388 

.383 
.408 
.430 
.441 
.446 

.439 
.467 
.484 
.497 
.494 

.505 
.505 
.500 
.495 
.497 

.497 
.513 
.535 
.553 
.589 

.628 
.645 
.661 
.699 
.796 

.848 
.891 
.952 
1.029 

.867 
.879 
.896 
.921 

.932 
.946 
.955 
.973 

1.008 
1.017 
1.038 



Net 
in- 
terest 



0.004 
.004 

.004 
.004 
.004 
.004 
.006 

.005 
.005 
.007 
.009 
.009 

.010 
.011 
.011 
.011 
.012 

.012 

.014 
.016 
.017 
.022 

.028 
.029 
.028 
.032 
.043 

.045 
.042 
.044 
.046 

.043 
.042 
.042 
.042 

.043 
.043 
.044 
.045 

.046 
.045 
.046 



Corporate profits with 
inventory valuation 

and capital 
consumption adjust- 
ments 



Total 



0.112 

.105 

.120 
.124 
.110 
.102 
.101 

.121 
.112 
.106 
.096 
.114 

.104 
.102 
.112 
.118 
.125 

.134 
.134 
.123 
.124 
.109 

.086 
.095 
.107 
.105 
.086 

.113 

.139 
.148 
.154 

.142 
.142 
.141 
.130 

.134 
.148 
.158 
.151 

.129 
.157 
.160 



Profits 

tax 
liability 



0.051 
.042 

.068 
.079 
.065 
.063 
.055 

.064 
.062 
.058 
.052 
.060 

.053 
.053 
.052 
.054 
.053 

.055 
.055 
.051 
.058 
.055 

.045 
.048 
.050 
.055 
.061 

.060 
.073 
.077 
.085 



Profits 
after 
tax* 



0.061 
.062 

.051 
.045 
.046 
.039 
.046 

.057 
.050 
.048 
.044 
.055 

.051 
.049 
.061 
.064 
.072 

.079 
.078 
.072 
.066 
.055 

.041 
.046 
.057 
.050 
.024 

.053 
.066 
.071 
.070 



073 


.068 


076 


.067 


072 


.069 


069 


.061 


075 


.059 


078 


.070 


076 


.082 


077 


.074 


071 


.057 


086 


.071 


086 


.074 

1 



Output 

per 
hour of 
all em- 
ployees 
(1972 
dollars) 



5.110 
5.333 

5.455 
5.634 
5.912 
6.167 
6.427 

6.625 
6.777 
6.873 
7.105 
7.139 

7.132 
7.374 
7.595 
7.788 
7.489 

7.721 

7.962 
8.057 



7.917 
7.978 
8.006 
7.957 
7.991 

8.025 
8.113 
8.103 

8.053 
8.139 
8.165 



1 Output is measured by gross domestic product of nonfinancial corporate business in 1972 dollars. 

2 This is equal 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 and nontax liability plus business transfer payments less subsidies. 

4 With inventory valuation and capital consumption adjustments. 

Sources : Department of Commerce (Bureau of Economic Analysis) and Department of Labor (Bureau of Labor Statistics). 



197 



Table B-13. — Personal consumption expenditures, 1929-78 
[Billions of dollars; quarterly data at seasonally adjusted annual rates] 



Year 

or 

quarter 



1929 

1933 

1939 

1940 

1941 

1942 

1943 

1944 

1945 

1946 

1947 

1948 

1949 

1950 

1951 

1952 

1953 

1954 

1955 

1956 

1957 

1958 

1959 

I960. 

1961 

1962 

1963 

1964 

1965 

1966 

1967 

1968 

1969 

1970 

1971 

1972 

1973 

1974 

1975 

1976 

1977 

1978" 

1976:1 

II.... 
III... 
IV.... 

1977:1 

II.... 
III... 
IV.... 

1978:1 

II.... 

III.. 

IV».. 



E „ 

li 

c S 
82- 
5" 

a. 

77.3 

45.8 

67.0 

71.0 
80.8 
88.6 
99.4 
108.2 
119.5 
143.8 
161.7 
174'. 7 
178.1 

192.0 
207.1 
217.1 
229.7 
235.8 
253.7 
266.0 
280.4 
289.5 
310.8 

324.9 
335.0 
355.2 
374.6 
400.4 
430.2 
464.8 
490.4 
535.9 
579.7 

618.8 

668.2 

733.0 

809.9 

889.6 

979.1 

1, 090. 2 

1, 206. 5 

1, 339. 7 

1,053.8 
1,075.1 
1, 098. 4 
1,133.7 

1,167.7 
1,188.6 
1,214.5 
1,255.2 

1,276.7 
1,322.9 
1,356.9 
1,402.2 



Durable goods ' 



9.2 

3.5 

6.7 

7.8 
9.7 
6.9 
6.5 
6.7 
8.0 
15.8 
20.4 
22.9 
25.0 

30.8 
29.8 
29.1 
32.5 
31.8 
38.6 
37.9 
39.3 
36.8 
42.4 

43.1 
41.6 
46.7 
51.4 
56.3 
62.8 
67.7 
69.6 
80.0 
85.5 

84.9 
97.1 
111.2 
123.7 
122.0 
132.6 
156.6 
178.4 
197.6 

152.2 
154.7 
156.7 
162.8 

173.2 
175.6 
177.4 
187.2 

183.5 
197.8 
199.5 
209.6 



3.3 
1.1 

2.3 

2.8 

3.5 

.7 

.8 

.8 

1.0 

4.1 

6.6 

8.0 

10.6 

13.7 
12.2 
11.3 
13.9 
13.0 
17.8 
15.8 
17.2 
14.8 
18.9 

19.7 
17.8 
21.5 
24.4 
26.0 
29.8 
30.1 
29.7 
35.8 
37.7 

34.9 
43.8 
50.6 
55.2 
48.0 
53.4 
69.7 
81.5 
89.7 

67.7 
69.1 
69.5 
72.6 

81.3 
81.2 
79.5 
84.0 

84.1 
92.5 
89.8 
92.5 



• I 



4.7 

1.9 

3.4 

3.8 
4.8 
4.6 
3.9 
3.8 
4.5 
8.4 
10.6 
11.5 
11.3 

13.7 
14.0 
14.0 
14.6 
14.6 
16.2 
17.1 
16.9 
16.6 
17.8 

17.7 
17.9 
18.9 
20.3 
22.8 
24.7 
27.7 
29.5 
32.6 
35.0 

36.7 
39.4 
44.8 
50.7 
54.9 
58.0 
63.9 
71.3 
77.6 

61.9 
63.0 
64.2 
66.5 

68.0 
69.9 
72.0 
75.3 

72.1 
76.5 
78.9 
82.9 



Nondurable goods' 







■ 














VI 






■o 






c 






CO 












C 


— 


"O 


JC 














t- 


La. 




37.7 


19.5 


9.4 


22.3 


11.5 


4.6 


35.1 


19.1 


7.1 


37.0 


20.2 


7.5 


42.9 


23.4 


8.8 


50.8 


28.4 


11.0 


58.6 


33.2 


13.4 


64.3 


36.7 


14.6 


71.9 


40.6 


16.5 


82.7 


47.4 


18.2 


90.9 


52,3 


18.8 


96.6 


54.2 


20.1 


94.9 


52.5 


19.3 


98.2 


53.9 


19.6 


108.8 


60.4 


21.2 


113 9 


63.4 


21.9 


116 5 


64.4 


22.1 


118.0 


65.4 


22.1 


122.9 


67.2 


23.1 


128.9 


69.9 


24.1 


135 ? 


73.6 


24.3 


139 8 


76.4 


24.7 


146.4 


79.1 


26.1 


151.1 


81.1 


26.7 


155.3 


83.2 


27.4 


161.6 


85.5 


28.7 


167.1 


87.8 


29.5 


176.9 


92.7 


31.9 


188.6 


98.9 


33.5 


204.7 


106.6 


36.6 


212.6 


109.6 


38.2 


230.4 


118.3 


41.8 


247.0 


126.1 


45.1 


264.7 


136.3 


46.6 


277.7 


140.6 


50.5 


299.3 


150.4 


55.1 


333.8 


168.1 


61.3 


376.3 


189.8 


65.3 


408.9 


209.6 


70.1 


442.6 


225.8 


75.7 


479.0 


245.2 


81.5 


525.8 


269.2 


88.9 


430.3 


219.4 


73.8 


437.4 


223.9 


74.2 


444.5 


227.4 


76.1 


458.3 


232.3 


78.5 


465.9 


237.5 


78.5 


473.6 


244.5 


79.3 


479.7 


246.4 


81.4 


496.9 


252.6 


86.7 


501.4 


257.7 


82.9 


519.3 


267.8 


87.5 


531.7 


272.0 


90.5 


550.8 


279.4 


94.6 



1.8 
1.5 
2.2 

2.3 

2.6 
2.1 
1.3 
1.4 
1.8 
3.4 
4.0 
4.8 
5.3 



5.5 
6.1 
6.8 
7.4 
7.8 
8.6 
9.4 
10.2 
10.6 
11.3 

12.0 
12.0 
12.6 
12.9 
13.5 
14.7 
16.0 
17.0 
18.4 
20.4 

22.0 
23.4 
24.9 
27.8 
36.4 
39.5 
42.8 
46.5 
51.1 

41.4 
41.9 
43.0 
45.1 

46.1 
46.2 
46.0 
47.5 

48.3 
49.1 
51.5 
55.6 



1.6 

1.2 

1.4 

1.5 
1.7 
1.9 
2.0 
2.0 
2.2 
2.5 
3.0 
3.4 
3.1 

3.4 
3.5 
3.4 
3.4 
3.5 
3.8 
3.9 
4.1 
4.2 
4.0 

3.8 
3.7 
3.7 
4.0 
4.1 
4.4 
4.7 
4.8 
5.0 
5.2 

5.4 
5.5 
6.3 
7.7 
9.6 
10.2 
12.2 
13.5 
14.8 

11.3 
11.5 
12.3 
13.7 

13.9 
12.9 
13.1 
13.9 

15.8 
15.2 
14.3 
13.7 



Services ■ 



30.3 

20.1 

25.2 

26.2 
28.2 
31.0 
34.3 
37.1 
39.6 
45.3 
50.4 
55.3 
58.2 

63.0 
68.5 
74.0 
80.6 
86.1 
92.1 
99.2 
105.9 
112.8 
121.9 

130.7 
138.1 
147.0 
156.1 
167.1 
178.7 
192.4 
208.1 
225.6 
247.2 

269.1 
293.4 
322.4 
352.3 
391.3 
437.5 
491.0 
549.2 
616.3 

471.3 
483.0 
497.2 
512.6 

528.6 
539.4 
557.5 
571.1 

591.8 
605.8 
625.8 
641.8 



11.7 
8.1 
9.4 

9.7 

10.4 
11.2 
11.8 
12.3 
12.8 
14.2 
16.0 
17.9 
19.6 

21.7 
24.3 
27.0 
29.8 
32.2 
34.3 
36.7 
39.3 
42.0 
45.0 

48.1 
51.2 
54.7 
58.0 
61.4 
65.5 
69.5 
74.1 
79.9 
86.8 

94.0 
102.7 
112.3 
123.2 
136.5 
150.2 
166.4 
184.6 
207.2 

160.2 
164.7 
168.2 
172.3 

177.3 
182.1 
186.9 
192.0 

198.1 
204.1 
210.1 
216.6 



Household 
operation ' 



4.0 

2.8 

3.8 

4.0 
4.3 
4.8 
5.2 
5.9 
6.4 
6.8 
7.5 
8.1 
8.5 

9.5 
10.4 
11.1 
12.0 
12.6 
14.0 
15.2 
16.2 
17.3 
18.5 

20.1 
21.0 
22.2 
23.4 
24.8 
26.3 
28.0 
30.6 
32.7 
35.5 

38.3 
41.6 
45.9 
50.2 
56.1 
64.5 
72.8 
81.6 
90.9 

69.3 
70.2 
73.5 
78.2 

80.2 
78.0 
83.7 
84.6 

89.6 
88.9 
92.6 
92.6 



1.2 

1.1 

1.4 

1.5 
1.5 
1.6 
1.7 
1.8 
1.9 
2.1 
2.3 
2.6 
2.9 

3.3 

3.7 
4.1 
4.5 
5.0 
5.5 
6.1 
6.5 
7.1 
7.6 

8.3 

8.8 
9.4 
9.9 
10.4 
10.9 
11.5 
12.2 
13.1 
14.2 

15.5 
17.0 
18.9 
20.6 
24.1 
29.3 
33.0 
38.0 
42.7 

31.3 
31.0 
33.0 
36.8 

38.0 
35.0 
39.5 
39.3 

43.3 
41.5 
43.3 
42.7 



> Total includes "other" category, not shown separately. 
1 Includes imputed rental value of owner-occupied dwellings. 

Source: Department of Commerce, Bureau of Economic Analysis. 



198 



Table B-14. — Gross private domestic investment, 1929-78 
{Billions of dollars; quarterly data at seasonally adjusted annual rates] 





















Chance in 










Fixed inves 








bus 


ness 




Gross 
















inventories 






Nonresidential 






Residential 








Year or 


private 
domes- 






















quarter 
























tic 










Prod 


ucers' 








Pro- 
ducers 
dur- 
able 
equip- 
ment 








invest- 
ment 


Total 


Total 


Structures 


durable 
equipment 


Total 


Non- 
farm 
struc- 
tures 


Farm 
struc- 
tures 


Total 


Non- 
farm 




Total 


Non- 
farm 


Total 


Non- 
farm 




1929 


16.2 


14.5 


10.5 


5.0 


4.8 


5.5 


4.8 


4.0 


3.8 


0.2 


0.1 


1.7 


1.8 


1933 


1.4 


3.0 


2.4 


.9 


.9 


1.4 


1.3 


.6 


.5 


.0 


.0 


-1.6 


-1.4 


1939 


9.3 


8.8 


5.8 


2.0 


1.9 


3.9 


3.3 


3.0 


2.8 


.1 


.1 


.4 


.3 


1940 


13.1 


10.9 


7.5 


2.3 


2.2 


5.2 


4.5 


3.5 


3.2 


.2 


.1 


2.2 


1.9 


1941 


17.9 


13.4 


9.4 


2.9 


2.8 


6.4 


5.5 


4.0 


3.7 


.2 


.1 


4.5 


4.0 


1942 


9.9 


8.1 


6.0 


1.9 


1.8 


4.1 


3.5 


2.2 


1.9 


.2 


.1 


1.8 


.7 


1943 


5.8 


6.4 


5.0 


1.3 


1.2 


3.7 


3.2 


1.4 


1.2 


.2 


.0 


-.6 


-.6 


1944 


7.2 


8.1 


6.8 


1.8 


1.7 


5.0 


4.2 


1.3 


1.1 


.1 


.0 


-1.0 


-.6 


1945 


10.6 


11.7 


10.1 


2.8 


2.6 


7.3 


6.3 


1.6 


1.4 


.1 


.0 


-1.0 


-.6 


1946 


30.7 


24.3 


16.8 


6.8 


6.1 


9.9 


9.0 


7.5 


6.8 


.5 


.2 


6.4 


6.4 


1947. 


34.0 


34.4 


22.9 


7.6 


6.8 


15.3 


13.4 


11.5 


10.5 


.7 


.3 


-.5 


1.3 


1948 


45.9 


41.1 


26.2 


8.9 


8.1 


17.3 


14.7 


15.0 


13.8 


.9 


.3 


4.7 


3.0 


1949 


35.3 


38.4 


24.3 


8.6 


7.8 


15.7 


12.8 


14.1 


12.9 


.8 


.3 


-3.1 


-2.2 


1950 


53.8 


47.0 


27.1 


9.3 


8.6 


17.8 


14.9 


19.9 


18.7 


.8 


.4 


6.8 


6.0 


1951 


59.2 


48.9 


31.1 


11.3 


10.5 


19.9 


16.9 


17.7 


16.6 


.8 


.4 


10.3 


9.1 


1952.. 


52.1 


49.0 


31.2 


11.5 


10.6 


19.7 


17.1 


17.8 


16.6 


.8 


.4 


3.1 


2.1 


1953 


53.3 


52.9 


34.3 


12.8 


12.0 


21.5 


18.7 


18.6 


17.5 


.8 


.4 


.4 


1.1 


1954 


52.7 


54.3 


34.0 


13.2 


12.4 


20.8 


18.4 


20.3 


19.2 


.7 


.4 


-1.5 


-2.1 


1955 


68.4 


62.4 


38.3 


14.4 


13.7 


23.9 


21.3 


24.1 


23.0 


.6 


.4 


6.0 


5.5 


1956 


71.0 


66.3 


43.7 


17.4 


16.6 


26.3 


24.1 


22.8 


21.4 




.5 


4.7 


5.1 


1957 


69.2 


67.9 


46.7 


18.1 


17.4 


28.6 


26.2 


21.2 


20.0 




.5 


1.3 


.8 


1958 


61.9 


63.4 


41.6 


16.7 


16.0 


24.9 


21.9 


21.8 


20.7 




.5 


-1.5 


-2.3 


1959 


77.6 


72.3 


45.3 


17.0 


16.1 


28.3 


25.2 


27.0 


25.8 




.6 


5.2 


5.3 


1960 


76.4 


72.7 


47.7 


18.2 


17.3 


29.5 


27.0 


25.0 


23.9 




.5 


3.8 


3.5 


1961 


74.3 


72.1 


47.1 


18.4 


17.5 


28.7 


26.1 


25.0 


23.8 




.5 


2.2 


1.9 


1962 


85.2 


78.7 


51.2 


19.4 


18.5 


31.8 


28.9 


27.4 


26.3 




.5 


6.5 


5.8 


1963 


90.2 


84.2 


53.6 


19.6 


18.6 


34.0 


30.6 


30.6 


29.4 




.6 


6.0 


5.2 


1964 


96.6 


90.8 


59.7 


21.5 


20.5 


38.2 


34.6 


31.2 


29.9 




.6 


5.8 


6.4 


1965 


112.0 


102.5 


71.3 


26.1 


25.1 


45.1 


41.2 


31.2 


29.9 




.7 


9.5 


8.5 


1966 


124.5 


110.2 


81.4 


29.2 


28.1 


52.2 


47.9 


28.7 


27.4 




.7 


14.3 


14.5 


1967 


120.8 


110.7 


82.1 


29.5 


28.2 


52.6 


48.0 


28.6 


27.2 




.7 


10.1 


9.4 


1968 


131.5 


123.8 


89.3 


31.6 


30.4 


57.7 


53.4 


34.5 


33.1 




.8 


7.7 


7.6 


1969 


146.2 


136.8 


98.9 


35.7 


34.3 


63.3 


58.9 


37.9 


36.3 




.9 


9.4 


9.2 


1970 


140.8 


137.0 


100.5 


37.7 


36.1 


62.8 


58.1 


36.6 


35.1 




.9 


3.8 


3.7 


1971 


160.0 


153.6 


104.1 


39.3 


37.8 


64.7 


59.9 


49.6 


47.9 




1.0 


6.4 


5.1 


1972 


188.3 


178.8 


116.8 


42.5 


41.1 


74.3 


69.1 


62.0 


60.3 




1.1 


9.4 


8.8 


1973 


220.0 


202.1 


136.0 


49.0 


46.9 


87.0 


80.1 


66.1 


64.3 




1.2 


17.9 


14.7 


1974 


214.6 


205.7 


150.6 


54.5 


51.8 


96.2 


88.2 


55.1 


52.7 


\.l 


1.2 


8.9 


10.8 


1975 


190.9 


201.6 


150.2 


53.8 


51.3 


96.4 


87.4 


51.5 


49.5 




1.1 


-10.7 


-14.3 


1976 


243.0 


232.8 


164.6 


57.3 


54.7 


107.3 


97.5 


68.2 


65.8 


\.\ 


1.3 


10.2 


12.2 


1977 


297.8 


282.3 


190.4 


63.9 


61.0 


126.5 


116.7 


91.9 


88.9 


1.5 


1.5 


15.6 


15.0 


1978 » 


344.5 


328.8 


222.0 


77.5 


74.3 


144.5 


133.8 


106.8 


103.6 


1.4 


1.7 


15.7 


16.7 


1976: 1 


231.5 


220.1 


157.7 


56.4 


53.8 


101.3 


91.4 


62.4 


59.8 


1.3 


1.3 


11.4 


12.7 


II 


243.5 


228.1 


162.2 


57.6 


55.0 


104.6 


94.7 


65.9 


63.8 


.8 


1.3 


15.4 


18.8 


III.... 


249.9 


235.3 


168.1 


57.3 


54.8 


110.8 


100.5 


67.3 


65.1 


.8 


1.3 


14.5 


15.2 


IV.... 


247.1 


247.6 


170.5 


57.9 


55.1 


112.6 


103.3 


77.1 


74.4 


1.4 


1.4 


-.6 


2.2 


1977: 1 


272.5 


262.2 


180.6 


59.3 


56.4 


121.4 


111.0 


81.6 


78.6 


1.6 


1.4 


10.3 


11.1 


II 


295.6 


278.6 


187.2 


63.4 


60.4 


123.8 


113.8 


91.4 


88.4 


1.6 


1.4 


17.0 


16.5 


III.... 


309.7 


287.8 


193.5 


65.4 


62.7 


128.1 


118.6 


94.3 


91.2 


1.6 


1.5 


21.9 


22.0 


IV.... 


313.5 


300.5 


200.3 


67.4 


64.5 


132.8 


123.4 


100.2 


97.5 


1.2 


1.6 


13.1 


10.4 


197S: 1 


322.7 


306.0 


205.6 


68.5 


65.2 


137.1 


127.2 


100.3 


97.3 


1.3 


1.7 


16.7 


16.9 


II 


345.4 


325.3 


220.1 


76.6 


73.4 


143.5 


132.9 


105.3 


102.1 


1.4 


1.8 


20.1 


22.1 


Ill— . 


350.1 


336.5 


227.5 


80.9 


78.0 


146.6 


135.5 


109.0 


105.7 


1.5 


1.7 


13.6 


14.6 


IV »>.__ 


359.9 


347.4 


235.0 


84.0 


80.8 


151.0 


139.7 


112.5 


109.3 


1.5 


1.7 


12.4 


13.1 



Source: Department of Commerce, Bureau of Economic Analysis. 



199 



Table E-15. — Inventcries and final sales of business, J 94 6- 78 
[Billions of dollars, except as noted; seasonally adjusted) 











Inventories 








Year and 


Total 


Farm 


Nonfarm 




Total 


Manufac- 
turing 


Wholesale 
trade 


Retail 
trade 


Other 


Fourth quarter: 
1946 


73.7 
86.9 
90.6 
81.0 

98.8 
112.1 
109.4 
110.1 
107.2 

112.1 
121.8 
126.7 
128.9 
132.3 

136.2 
138.4 
145.2 
151.5 
157.6 

172.7 
189.1 
202.2 
215.3 
236.2 

244.2 
261.9 
288.6 
355.8 
425.6 

428.3 
459.7 
498.6 
571.0 

435.9 
447.0 
451.8 
459.7 

473.6 
476.4 
483.6 
498.6 

520.7 
536.5 
548.5 
571.0 


21.8 
25.8 
23.4 
19.5 

24.2 
26.5 
23.1 
21.6 
20.5 

17.6 
18.3 
20.9 
24.9 
23.6 

24.8 
25.0 
26.6 
26.9 
25.7 

29.7 
28.9 
29.2 
30.4 
33.4 

31.7 
36.8 
44.6 
66.2 
61.9 

64.3 
60.2 
60.3 
71.4 

64.1 
64.0 
59.8 
60.2 

62.0 
58.0 
55.7 
60.3 

66.3 
68.0 
68.1 
71.4 


51.9 
61.1 
67.2 
61.4 

74.6 
85.6 
86.3 
88.5 
86.7 

94.6 
103.5 
105.8 
103.9 
108.7 

111.3 
113.4 
118.6 
124.6 
131.8 

143.0 
160.2 
173.0 
184.9 
202.8 

212.5 
225.1 
243.9 
289.6 
363.7 

364.0 
399.5 
438.3 
499.5 

371.8 
383.0 
392.0 
399.5 

411.6 
418.4 
428.0 
438.3 

454.4 
468.5 
480.4 
499.5 


26.7 
31.8 
34.8 
31.0 

37.4 
46.2 
47.3 
49.3 
47.0 

51.4 
57.5 
57.9 
56.0 
57.5 

58.1 
59.5 
62.5 
64.8 
68.5 

73.7 
83.4 
91.1 
97.4 
107.1 

110.8 
113.6 
120.4 
143.6 
186.4 

187.9 
203.9 
219.2 
248.4 

190.5 
195.3 
199.7 
203.9 

208.7 
211.9 
215.5 
219.2 

225.9 
232.0 
239.0 
248.4 


9.6 
10.6 
12.1 
11.7 

14.3 
14.9 
14.9 
15.1 
15.4 

16.7 
17.8 
18.1 
18.1 
19.2 

19.6 

20.2 
20.9 
22.4 
23.6 

25.3 
28.6 
30.6 
32.4 
35.3 

38.3 

41.2 
45.7 
55.2 
69.8 

68.1 
76.6 
85.9 
100.5 

70.0 
73.8 
75.4 
76.6 

80.1 
80.9 
82.8 
85.9 

90.9 
94.2 
96.4 
100.5 


11.9 
14.1 
15.3 
14.3 

17.7 
18.3 
17.9 
18.5 
18.7 

20.9 
21.8 
22.9 
22.9 
24.1 

25.6 

25.1 
26.7 
28.2 
29.8 

33.1 
36.6 
37.8 
40.7 
44.4 

45.6 
51.0 
55.9 
64.4 
72.3 

72.1 
80.2 
89.9 
103.4 

74.6 
76.5 
78.6 
£0.2 

82.9 
84.8 
87.5 
89.9 

94.3 
97.5 
99.0 
103.4 


3 7 


1947 


4.6 


1948 


4.9 


1949 

1950 


4.4 
5.2 


1951 


6.2 


1952 


6.2 


1953 


5.5 


1954.... 


5.6 


1955 


5.6 


1956. 


6.4 


1957.... 


6.9 


1958.. 


6.9 


1959... 


8.0 


1960 


8 1 


1961 


8.7 


1962 


8.6 


1963 


9.2 


1964 


9.9 


1965 


10.9 


1966 


11.6 


1967 


13 5 


1968 


14.4 


1969 


16.1 


1970 


17.7 


1971... 


19 2 


1972... 


21.8 


1973 


26.4 


1974 


35.2 


1975 


35.9 


1976 

1977. 

1978 p 

1976:1 


38.8 
43.3 
47.2 

36.7 


II 


37.3 


Ill 


38.3 


IV 


38.8 


1977:1 


39.9 


II... 


40.7 


Ill 


42.3 


IV 


43.3 


1978: 1 


43.3 


II 

Ill 

IVp 


44.8 
45.9 
47.2 



Final 
sales 1 



192.0 
219.6 
235.7 
234.6 

259.8 
295.6 
313.3 
325.8 
330.1 

356.5 
377.0 
392.7 
405.0 
426.7 

442.1 
465.3 
492.7 
524.2 
553.1 

610.7 
647.5 
688.0 
757.6 
804.5 

839.4 

915.2 

1,019.9 

1,120.5 

1,216.0 

1, 355. 1 
1,478.6 
1, 647. 3 
1, 870. 6 

1,381.4 
1,410.0 
1, 436. 1 
1,478.6 

1,517.5 
1, 565. 5 
1, 604. 5 
1,647.3 

1, 667. 3 
1,751.7 
1, 803. 9 
1, 870. 6 



Inventory-final 
sales ratio 





Non- 




farm > 


0.384 


0.270 


.396 


.278 


.384 


.285 


.345 


.262 


.380 


.287 


.379 


.290 


.349 


.275 


.338 


.272 


.325 


.263 


.315 


.265 


.323 


.274 


.323 


.269 


.318 


.257 


.310 


.255 


.308 


.252 


.297 


.244 


.295 


.241 


.289 


.238 


.285 


.238 


.283 


.234 


.292 


.247 


.294 


.251 


.284 


.244 


.294 


.252 


.291 


.253 


.286 


.246 


.283 


.239 


.318 


.258 


.350 


.299 


.316 


.269 


.311 


.270 


.303 


.266 


.305 


.267 


.316 


.269 


.317 


.272 


.315 


.273 


.311 


.270 


.312 


.271 


.304 


.267 


.301 


.267 


.303 


.266 



.312 
.306 
.304 
,305 



1 End of quarter. 

' Annual rates. 

3 Ratio based on total final sales, which include a small amount of final sales by farms. 

Note.— The industry classification of inventories is on an establishment basis and is based on the 1972 Standard Indus- 
trial Classification (SIC) beginning in 1948 and on the 1942 SIC prior to 1948. 

Source: Department of Commerce, Bureau of Economic Analysis. 



200 



Table B-16. — Inventories and final sales of business in 1972 dollars, 1947-78 
I Billions of 1972 dollars, except as noted; seasonally adjusted! 











Inventories 


> 







Final 
sales ' 


Inventory- final 
sales ratio 


Year and 


Total 

118.6 
124.1 
119.7 

130.2 
143.9 
148.2 
149.7 
147.5 

155.3 
161.1 
162.6 
160.8 
167.2 

171.6 
174.5 
182.6 
190.4 
197.7 

209.0 
225.7 
237.7 
246.4 
257.0 

261.3 
267.9 
277.4 
293.9 
301.8 

292.1 
298.7 
307.6 
318.0 

293.9 
296.5 
298.8 
298.7 

300.2 
302.7 
305.7 
307.6 

310.7 
313.9 
316.1 
318.0 


Farm 


Total 


N 

Manufac- 
turing 


onfarm 

Wholesale 
trade 


Retail 
trade 


Total 




quarter 


Other 


Non- 
farm' 


Fourth quarter: 

1947 

1948 

1949 

1950... 


25.7 
26.7 
26.2 

27.5 
29.1 
30.4 
30.2 
31.1 

31.5 
30.7 
31.4 
32.4 
32.4 

32.8 
33.2 
34.5 
35.7 
35.1 

36.2 
36.0 
36.8 
37.0 
37.3 

37.7 
39.2 
39.8 
42.1 
41.8 

43.0 
41.1 
40.6 
40.0 

42.7 
41.9 
41.8 
41.1 

40.7 
40.7 
40.3 
40.6 

40.5 
40.2 
40.1 
40.0 


93.0 
97.3 
93.5 

102.7 
114.8 
117.9 
119.6 
116.5 

123.7 
130.3 
131.2 
128.4 
134.8 

138.8 
141.2 
148.1 
154.7 
162.6 

172.8 
189.7 
200.9 
209.4 
219.7 

223.6 
228.8 
237.6 
251.8 
260.1 

249.1 
257.6 
267.0 
278.0 

251.3 
254.5 
257.0 
257.6 

259.5 
262.0 
265.4 
267.0 

270.2 
273.6 
276.0 
278.0 


49.9 
51.3 
48.5 

51.8 
62.5 
65.2 
66.9 
63.3 

66.7 
71.6 
71.1 
68.6 
71.1 

72.4 
74.2 
78.4 
80.8 
84.7 

89.1 
99.0 
105.9 
110.7 
115.8 

117.1 
115.4 
117.5 
123.6 
128.6 

124.2 
126.9 
128.8 
133.2 

124.3 
125.3 
126.3 
126.9 

127.3 
128.3 
129.1 
128.8 

129.9 
131.5 
132.9 
133.2 


13.8 
16.1 
16.1 

18.3 
18.9 
19.2 
19.4 
19.7 

21.4 
22.0 
21.9 
21.8 
23.7 

24.3 
25.0 
25.9 
27.8 
29.1 

30.5 
33.7 
35.5 
36.6 
38.2 

40.4 
42.0 
44.4 
47.4 
50.6 

47.2 
50.4 
53.7 
57.8 

48.0 
49.6 
50.3 
50.4 

51.4 
51.9 
52.7 
53.7 

55.7 
56.6 
56.8 
57.8 


20.5 
21.3 
20.9 

23.9 
23.9 
23.9 
24.5 
24.6 

27.2 
27.5 
28.4 
28.2 
29.6 

31.5 
30.6 
32.5 
34.1 
36.0 

39.4 
42.7 
43.1 
45.3 
47.7 

47.3 
51.9 
54.4 
58.2 
56.5 

54.0 
56.7 
60.6 
62.9 

55.2 
55.8 
56.6 
56.7 

57.3 
58.3 
59.8 
60.6 

61.1 
61.7 
62.2 
62.9 


8.7 
8.6 
7.8 

8.7 
9.5 
9.6 
8.7 
8.8 

8.4 
9.2 
9.8 
9.8 
10.5 

10.7 
11.4 
11.4 
12.0 
12.8 

13.8 
14.3 
16.3 
16.8 
18.0 

18.8 
19.5 
21.3 
22.7 
24.5 

23.6 
23.6 
23.9 
24.1 

23.8 
23.9 
23.7 
23.6 

23.5 
23.5 
23.8 
23.9 

23.4 
23.9 
24.1 
24.1 


397.2 
412.0 
415.1 

442.6 
476.5 
499.1 
516.2 
517.0 

547.4 
557.6 
565.3 
577.2 
596.8 

609.0 
636.6 
664.2 
6W.3 
730.7 

781.3 
809.2 
837.2 
882.8 
892.2 

891.7 

935.0 

1,007.6 

1,031.8 

1, 005. 3 

1, 043. 3 
1,090.3 
1,148.4 
1,201.8 

1, 055. 5 
1, 065. 3 

1. 074. 1 
1,090.3 

1. 106. 2 
1,119.6 
1,133.9 
1,148.4 

1,141.1 
1, 167. 3 
1,180.3 
1,201.8 


0.299 
.301 
.288 

.294 
.302 
.297 
.290 
.285 

.284 
.289 
.288 
.279 
.280 

.282 
.274 
.275 
.272 
.271 

.264 
.279 
.284 
.279 
.288 

.293 
.287 
.275 
.285 
.300 

280 
.274 
.268 
.265 

.278 
.278 
.278 
.274 

.271 
.270 
.270 
.268 

.272 
.269 
.268 
.265 


0.234 
.236 
.225 

.232 


1951 


.241 


1952 


.236 


1953 


.232 


1954 


.225 


1955 


.226 


1956 „__ 

1957 


.234 
.232 


J958 


.222 


1959 


.226 


1960 


.228 


1961... 


.221 


1962 


.223 


1963 


.221 


1964 


.223 


1965 


.218 


1966 


.234 


1967 


.240 


1968 


.237 


1969 


.246 


1970 


.251 


1971 


.245 


1972 


.236 


1973.. 


244 


1974 


259 


1975 


.239 


1976 


.236 


1977 


.233 


1978 » 


231 


1976:1 


.238 


II 


.239 


Ill 


.239 


IV 


.236 


1977:1 


.235 


II 


.234 


Ill 


.234 


IV 


.233 


1978:1 


.237 


II 


.234 


Ill 


.234 


IV» 


.231 







1 End of quarter. 

> Annual rates. 

' Ratio based on total final sales, which include a small amount of final sales by farms. 

Note.— The industry classification of inventories is on an establishment basis and is based on the 1972 Standard 
Industrial Classification (SIC) beginning in 1948 and on the 1942 SIC prior to 1948. 

Source : Department of Commerce, Bureau of Economic Analysis. 



201 



Table B-17. — Relation of gross national product and national income, 1929-78 
[Billions of dollars; quarterly data at seasonally adjusted annual rates] 





Gross 
national 
product 


Less: 
Capital 
consump- 
tion allow- 
ances with 

capital 
consump- 
tion adjust- 
ment 


Equals: 

Net 
national 
product 


Plus: 

Subsidies 

less 
current 
surplus 
of govern- 
ment 
enter- 
prises 


Less: 




Year or quarter 


Indirect 
business 
tax and 
nontax 
liability 


Business 
transfer 
payments 


Statistical 
discrep- 
ancy 


Equals: 
National 
income 


1929 


103.4 

55.8 

90.8 

100.0 
124.9 
158.3 
192.0 
210.5 
212.3 
209.6 
232.8 
259.1 
258.0 

286.2 
330.2 
347.2 
366.1 
366.3 
399.3 
420.7 
442.8 
448.9 
486.5 

506.0 
523.3 
563.8 
594.7 
635.7 
688.1 
753.0 
796.3 
868.5 
935.5 

982.4 
1, 063. 4 
1,171.1 
1,306.6 
1,412.9 
1, 528. 8 
1, 700. 1 
1,887.2 
2,106.6 

1, 649. 7 
1, 685. 4 
1,715.6 

1, 749. 8 

1,806.8 
1,867.0 
1,916.8 
1, 958. 1 

1. 992. 
2, 087. 5 

2. 136. 1 

2, 210. 8 


9.7 

7.5 

8.7 

9.0 
10.0 
11.2 
11.5 
11.8 
12.3 
13.8 
17.2 
20.3 
22.0 

23.9 
27.6 
29.6 
31.6 
33.1 
35.3 
38.9 
42.0 
44.1 
46.1 

47.7 
49.1 
50.5 
52.2 
54.6 
57.5 
61.7 
67.0 
73.8 
82.5 

90.8 
98.8 
105.4 
117.7 
137.7 
162.0 
177.8 
195.2 
216.9 

172.7 
175.8 
179.2 
183.4 

187.3 
192.4 
198.5 
202.6 

207.3 
213.3 
220.8 
226.3 


93.7 

48.3 

82.1 

91.0 
114.9 
147.1 
180.5 
198.7 
200.0 
195.7 
215.6 
238.8 
236.1 

262.3 
302.6 
317.6 
334.5 
333.2 
364.0 
381.8 
400.8 
404.8 
440.4 

458.3 
474.2 
513.3 
542.5 
581.2 
630.6 
691.3 
729.3 
794.7 
853.1 

891.6 

964.7 

1,065.8 

1,188.9 

1. 275. 2 
1, 366. 9 

1. 522. 3 
1, 692. 
1, 889. 7 

1, 477. 
1,509.6 
1, 536. 3 
1, 566. 4 

1,619.5 

1. 674. 6 
1,718.3 
1,755.5 

1. 784. 7 
1, 874. 2 
1,915.3 
1, 984. 5 


-0.2 

-.0 

.4 

.4 

.1 

.1 

.1 

.6 

.7 

.9 

-.2 

-.1 

-.3 

.1 
-.1 
-.3 

-.5 
-.3 
-.0 
.7 
.7 
1.1 
.1 

.4 
1.7 
1.8 
1.1 
1.7 
1.6 
2.5 
1.6 
1.3 
1.8 

2.7 
2.4 
3.6 
3.9 
1.0 
2.3 
.7 
2.8 
3.7 

.8 
.4 
.9 
.8 

1.0 
1.1 
2.7 
6.3 

4.1 
4.3 
2.1 
4.4 


7.1 

7.1 

9.4 

10.1 
11.3 
11.8 
12.8 
14.2 
15.5 
17.1 
18.4 
20.1 
21.3 

23.4 
25.3 
27.7 
29.7 
29.6 
32.2 
35.1 
37.5 
38.7 
41.8 

45.4 
48.0 
51.6 
54.6 
58.8 
62.6 
65.3 
70.2 
78.8 
86.4 

94.0 
103.4 
111.0 
120.2 
128.6 
139.2 
151.3 
165.1 
178.2 

146.4 
149.8 
152.9 
156.3 

160.3 
163.3 
166.5 
170.1 

173.3 
179.4 
177.7 
182.3 


0.6 

.7 

.5 

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

.8 
.9 
1.0 
1.2 
1.1 
1.2 
1.4 
1.5 
1.6 
1.8 

2.0 
2.0 
2.1 
2.4 
2.7 
2.8 
3.0 
3.1 
3.4 
3.8 

4.0 
4.2 
4.7 
5.4 
5.9 
7.6 
8.3 
9.6 
10.7 

8.1 
8.2 
8.2 
8.5 

9.2 
9.4 
9.9 
10.0 

10.2 
10.5 
10.9 
11.3 


1.1 

.7 

1.4 

1.1 

.5 

-.8 

-1.8 

2.7 

4.1 

.7 

1.8 

-1.2 

1.0 

2.0 
4.0 
2.7 
3.3 
3.0 
2.5 

-.8 
.2 
1.7 

-.2 

-.7 
1.6 
4.0 
3.7 
2.2 
.9 
3.2 
1.7 
-.6 
-3.3 

-2.1 
1.3 
1.7 
2.6 
5.8 
7.4 
4.2 
4.7 
.9 

3.4 
4.1 
4.0 
5.3 

3.4 
3.7 
7.1 
4.8 

2.2 
.5 

.4 


84.8 


1933 


39.9 


1939 


71.3 


1940 


79.7 


1941.. . .... 


102.6 


1942 


135.7 


1943 


169.1 


1944 


181.9 


1945 


180.6 


1946 


178.3 


1947.. 


194.6 


1948 , 

1949... 


219.0 
212.7 


1950 


236.2 


1951 


272.3 


1952 


285.8 


1953 


299.7 


1954. 


299.1 


1955.. 


328:0 


1956... 


346.9 


1957... 


362.3 


1958 


364.0 


1959.. 


397.1 


1960 


412.0 


1961 


424.2 


1962 


457.4 


1963 


482.8 


1964... 


519.2 


1965 


566.0 


1966 


622.2 


1967 


655.8 


1968 


714.4 


1969 


767.9 


1970... 


798.4 


1971 


858.1 


1972 


951.9 


1973 


1,064.6 


1974 


1, 136. 


1975 


1,215.0 


1976 


1, 359. 2 


1977 


1,515.3 


1978p 


1, 703. 6 


1976: 1 


1,319.8 


II 


1, 347. 9 


Ill 


1, 372. 1 


IV 


1,397.0 
1, 447. 5 


1977: 1 


II 

Ill 


1, 499. 3 
1,537.6 


IV 

1978: 1 


1, 576. 9 

1, 603. 1 
1, 688. 1 
1, 728. 4 


n 

Ill 


IV* 











Source: Department of Commerce, Bureau of Economic Analysis. 



202 



Table B-18. — Relation of national income and personal income, 1929-78 
[Billions of dollars; quarterly data at seasonally adjusted annual rates] 









Less: 






Plus: 




Equals: 




Corpo- 






















rate 






















profits 


















Year or 
quarter 


National 
income 


with 
inven- 
tory 
valuation 

and 
capital 
con- 
sumption 
adjust- 
ments 


Net 
interest 


Contri- 
butions 

for 
social 
insur- 
ance 


Wage 
accruals 

less 

dis- 
burse- 
ments 


Govern- 
ment 
transfer 
Pay- 
ments 

to 
persons 


Personal 
interest 
income 


Divi- 
dends 


Business 
transfer 
pay- 
ments 


Personal 
income 


1929 


84.8 


9.2 


4.7 


0.2 


.0 


0.9 


6.9 


5.8 


0.6 


84.9 


1933 


39.9 


-1.7 


4.1 


.3 


.0 


1.5 


5.5 


2.0 


.7 


46.9 


1939 


71.3 


5.3 


3.6 


2.1 


.0 


2.5 


5.4 


3.8 


.5 


72.4 


1940 


79.7 


8.7 


3.3 


2.3 


.0 


2.7 


5.3 


4.0 


.4 


77.8 


1941 


102.6 


14.1 


3.3 


2.8 


.0 


2.6 


5.3 


4.4 


.5 


95.3 


1942 


135.7 


19.3 


3.1 


3.5 


.0 


2.7 


5.2 


4.3 


.5 


122.4 


1943 


169.1 


23.5 


2.7 


4.5 


.2 


2.5 


5.1 


4.4 


.5 


150.7 


1944 


181.9 


23.6 


2.4 


5.2 


-.2 


3.1 


b.2 


4.6 


.5 


164.4 


1945 


180.6 


19.0 


2.2 


6.1 


.0 


5.6 


5.9 


4.6 


.5 


169.8 


1946 


178.3 


16.6 


1.6 


6.1 


-.0 


10.8 


6.4 


5.6 


.5 


177.3 


1947 


194.6 


22.2 


2.1 


5.8 


.0 


11.2 


7.3 


6.3 


.6 


189.8 


1948 


219.0 


29.1 


2.1 


5.4 


.0 


10.6 


7.7 


7.0 


.7 


208.5 


1949 


212.7 


26.9 


2.2 


5.9 


-.0 


11.7 


8.2 


7.2 


.8 


205.6 


1950 


236.2 


33.7 


2.3 


7.1 


.0 


14.4 


8.9 


8.8 


.8 


226.1 


1951 


272.3 


38.1 


2.7 


8.5 


.1 


11.6 


9.6 


8.5 


.9 


253.7 


1952 


285.8 


35.4 


3.0 


9.0 


-.0 


12.1 


10.3 


8.5 


1.0 


270.4 


1953 


299.7 


35.5 


3.4 


9.1 


-.1 


12.9 


11.4 


8.8 


1.2 


286.1 


1954 


299.1 


34.6 


4.3 


10.1 


.0 


15.1 


12.7 


9.1 


1.1 


288.2 


1955 


328.0 


44.6 


4.8 


11.5 


.0 


16.2 


13.8 


10.3 


1.2 


308.8 


1956 


346.9 


42.9 


5.2 


12.9 


.0 


17.3 


15.3 


11.1 


1.4 


330.9 


1957 


362.3 


42.1 


6.5 


14.9 


.0 


20.1 


17.4 


11.5 


1.5 


349.3 


1958 


364.0 


37.5 


8.0 


15.2 


.0 


24.3 


18.8 


11.3 


1.6 


359.3 


1959 


397.1 


48.2 


8.8 


18.0 


.0 


25.2 


20.9 


12.2 


1.8 


382.1 


1960 


412.0 


46.6 


9.8 


21.1 


.0 


27.0 


23.3 


12.9 


2.0 


399.7 


1961 


424.2 


46.9 


11.2 


21.9 


.0 


30.8 


24.6 


13.3 


2.0 


415.0 


1962 


457.4 


54.9 


12.8 


24.3 


.0 


31.6 


27.1 


14.4 


2.1 


440.7 


1963 


482.8 


59.6 


14.3 


27.3 


.0 


33.4 


30.2 


15.5 


2.4 


463.1 


1964 


519.2 


67.0 


15.9 


28.7 


.0 


34.8 


33.3 


17.3 


2.7 


495.7 


1965 


566.0 


77.1 


18.5 


30.0 


.0 


37.6 


37.2 


19.1 


2.8 


537.0 


1966 


622.2 


82.5 


21.9 


38.8 


.0 


41.6 


41.8 


19.4 


3.0 


584.9 


1967 


655.8 


79.3 


24.3 


43.4 


.0 


49.5 


45.0 


20.1 


3.1 


626.6 


1968 


714.4 


85.8 


26.8 


48.1 


.0 


56.5 


49.6 


21.9 


3.4 


685.2 


1969 


767.9 


81.4 


30.8 


54.9 


.0 


62.7 


55.9 


22.6 


3.8 


745.8 


1970 


798.4 


67.9 


37.5 


58.7 


.0 


75.9 


64.3 


22.9 


4.0 


801.3 


1971 


858.1 


77.2 


42.8 


b4.8 


.6 


89.9 


69.3 


23.0 


4.2 


859.1 


1972 


951.9 


92.1 


47.0 


73.6 


.0 


99.4 


74.6 


24.6 


4.7 


942.5 


1973 


1, 064. 6 


99.1 


52.3 


91.5 


-.1 


113.5 


84.1 


27.8 


5.4 


1,052.4 


1974 


1,136.0 


83.6 


69.0 


103.8 


-.5 


134.9 


103.0 


31.0 


5.9 


1,154.9 


1975 


1,215.0 


95.9 


. 78.6 


110.6 


.0 


170.6 


115.5 


31.9 


7.6 


1, 255. 5 


1976 


1, 359. 2 


127.0 


84.3 


125.1 


.0 


185.6 


126.3 


37.9 


8.3 


1, 380. 9 


1977 


1,515.3 


144.2 


95.4 


140.3 


.0 


199.2 


141.2 


43.7 


9.6 


1, 529. 


1978*.... 


1, 703. 6 


160.0 


106.1 


164.3 


.0 


215.2 


158.9 


49.3 


10.7 


1, 707. 3 


1976: 1... 


1,319.8 


126.8 


80.1 


121.7 


.0 


182.1 


121.0 


34.5 


8.1 


1,336.9 


II... 


1, 347. 9 


128.6 


82.0 


124.1 


.0 


181.1 


123.5 


37.2 


8.2 


1, 363. 2 


III.. 


1, 372. 1 


130.0 


86.2 


126.1 


.0 


188.1 


128.2 


38.4 


8.2 


1, 392. 8 


IV.. 


1, 397. 


122.5 


88.9 


128.7 


.0 


191.2 


132.5 


41.4 


8.5 


1,430.5 


1977: 1... 


1, 447. 5 


129.9 


91.7 


136.0 


.0 


194.2 


135.9 


41.5 


9.2 


1,470.7 


II... 


1, 499. 3 


143.7 


93.7 


139.1 


.0 


194.6 


139.1 


42.7 


9.4 


1, 508. 6 


III.. 


1,537.6 


154.8 


97.3 


141.3 


.0 


202.0 


143.6 


44.1 


9.9 


1, 543. 7 


IV.. 


1,576.9 


148.2 


99.0 


145.0 


.0 


205.9 


146.0 


46.3 


10.0 


1,593.0 


1978: 1... 


1,603.1 


132.6 


101.7 


157.4 


.0 


208.9 


151.4 


47.0 


10.2 


1, 628. 9 


II... 


1,688.1 


163.4 


104.6 


162.7 


.0 


210.1 


156.3 


48.1 


10.5 


1,682.4 


ML. 


1,728.4 


165.2 


107.4 


166.2 


.2 


219.6 


161.7 


50.1 


10.9 


1,731.7 


IV ». 






110.8 


170.7 


.0 


222.4 


166.3 


51.9 


11.3 


1, 786. 4 











Source: Department of Commerce, Bureau of Economic Analysis. 



203 



Table B-19. — National income by type of income, 1929-78 
[Billions of dollars; quarterly data at seasonally adjusted annual rates] 





Na- 
tional 

in- 
come ' 


Con 

( 


ipensation of 


Proprietor: 


' income with inventory valuation and capital 
consumption adjustments 




mployees 


Total 


Farm 


Nonfarm 


Year or 
quarter 


Total 


Wages 
and 

sala- 
ries 


Sup- 
ple- 
ments 

to 
wages 
and 
sala- 
ries ' 


Total 


In- 
come' 


Capi- 
tal 
con- 
sump- 
tion 
ad- 
just- 
ment 


Total 


In- 
come 4 


Inven- 
tory 
valua- 
tion 
ad- 
just- 
ment 


Capi- 
tal 
con- 
sump- 
tion 
ad- 
just- 
ment 


1929 


84.8 

39.9 

71.3 

79.7 
102.6 
135.7 
169.1 
181.9 
180.6 
178.3 
194.6 
219.0 
212.7 

236.2 
272.3 
285.8 
299.7 
299.1 
328.0 
346.9 
362.3 
364.0 
397.1 

412.0 
424.2 
457.4 
482.8 
519.2 
566.0 
622.2 
655.8 
714.4 
767.9 

798.4 
858.1 
951.9 
1, 064. 6 
1,136.0 
1,215.0 
1, 359. 2 
1,515.3 
1, 703. 6 

1,319.8 
1, 347. 9 
1,372.1 
1, 397. 

1, 447. 5 
1, 499. 3 
1, 537. 6 
1, 576. 9 

1,603.1 
1, 688. 1 
1, 728. 4 


51.1 

29.5 

48.1 

52.1 
64.8 
85.3 
109.5 
121.2 
123.1 
118.1 
129.2 
141.4 
141.3 

154.8 
181.0 
195.7 
209.6 
208.4 
224.9 
243.5 
256.5 
258.2 
279.6 

294.9 
303.6 
325.1 
342.9 
368.0 
396.5 
439.3 
471.9 
519.8 
571.4 

609.2 

650.3 

715.1 

799.2 

875.8 

931.1 

1, 036. 8 

1, 153. 4 

1,301.2 

1,001.7 

1. 026. 
1, 046. 1 
1, 073. 3 

1,107.9 
1, 140. 5 
1,165.8 

1. 199. 7 

1,241.0 

1. 287. 8 

1. 317. 1 
1,358.9 


50.5 

29.0 

46.0 

49.9 
62.1 
82.1 
105.8 
116.7 
117.5 
112.0 
123.1 
135.5 
134.7 

147.0 
171.3 
185.3 
198.5 
196.8 
211.7 
228.3 
239.3 
240.5 
258.9 

271.9 
279.5 
298.0 
313.4 
336.1 
362.0 
398.4 
427.5 
469.5 
514.6 

546.5 
580.0 
633.8 
701.2 
764.1 
805.9 
890.1 
983.6 
1,100.7 

861.7 
881.5 
897.3 
919.9 

946.4 

973.4 

993.6 

1,021.2 

1, 050. 8 
1, 090. 2 
1,113.4 
1, 148. 5 


0.6 

.5 

2.1 

2.3 
2.7 
3.2 
3.8 
4.5 
5.6 
6.0 
6.1 
5.9 
6.6 

7.8 
9.7 
10.4 
11.0 
11.6 
13.2 
15.2 
17.2 
17.7 
20.6 

23.0 
24.1 
27.1 
29.5 
31.8 
34.5 
40.9 
44.4 
50.3 
56.8 

62.7 
70.3 
81.4 
98.0 
111.7 
125.2 
146.7 
169.8 
200.5 

140.0 
144.6 
148.8 
153.4 

161.5 
167.1 
172.2 
178.4 

190.2 
197.6 
203.6 
210.4 


14.9 

5.8 

11.7 

12.9 
17.4 
24.0 
29.0 
30.2 
31.7 
36.6 
35.8 
40.7 
36.1 

38.4 
42.8 
42.9 
41.3 
40.8 
42.5 
43.6 
45.0 
47.4 
47.2 

47.0 
48.3 
49.6 
50.3 
52.2 
56.7 
60.3 
61.0 
63.4 
66.2 

65.1 
67.7 
76.1 
92.4 
86.2 
87.0 
88.6 
99.8 
112.9 

88.6 
88.8 
87.4 
89.5 

95.6 
98.9 
97.2 
107.3 

105.0 
110.1 
114.5 
121.9 


6.2 

2.6 

4.4 

4.5 
6.4 
9.8 
11.7 
11.6 
12.2 
14.9 
15.2 
17.5 
12.7 

13.5 
15.8 
14.9 
12.9 
12.3 
11.3 
11.2 
11.0 
13.1 
10.7 

11.4 
11.8 
11.9 
11.6 
10.3 
12.6 
13.6 
12.1 
12.0 
13.9 

13.9 
14.3 
18.0 
32.0 
25.4 
23.5 
18.4 
20.2 
25.1 

20.9 
19.6 
16.9 
16.3 

19.4 
20.0 
16.5 
25.1 

21.9 
24.0 
25.0 
29.5 


6.3 

2.5 

4.4 

4.5 
6.5 
10.3 
12.2 
12.2 
12.6 
15.1 
15.6 
18.1 
13.4 

14.1 
16.6 
15.7 
13.7 
12.9 
11.9 
11.8 
11.8 
13.9 
11.6 

12.3 
12.7 
12.8 
12.5 
11.2 
13.5 
14.6 
13.2 
13.3 
15.4 

15.3 
16.0 
20.0 
34.2 
27.9 
27.1 
22.4 
24.6 
29.9 

24.9 
23.6 
20.9 
20.3 

23.4 
24.2 
21.0 
29.8 

26.6 
28.8 
29.7 
34.3 


-0.1 

.1 

-.0 

-.0 
-.0 
-.5 
-.5 
-.6 
-.4 
-.2 
-.4 
-.6 
-.7 

-.7 
-.8 
-.8 
-.7 
-.6 
-.6 
-.6 
-.8 
-.8 
-.9 

-.9 

-.9 
-1.0 

-.9 
-1.0 

-.9 
-1.0 
-1.2 
-1.3 
-1.4 

-1.4 
-1.7 
-2.0 
-2.2 
-2.5 
-3.7 
-4.0 
-4.4 
-4.8 

-4.0 
-4.0 
-4.0 
-4.0 

-4.0 
-4.2 
-4.5 
-4.7 

-4.7 
-4.8 
-4.8 
-4.8 


8.8 

3.2 

7.3 

8.4 
10.9 
14.3 
17.3 
18.6 
19.4 
21.6 
20.6 
23.2 
23.5 

24.9 
27.0 
28.0 
28.4 
28.5 
31.2 
32.4 
33.9 
34.3 
36.6 

35.6 
36.4 
37.7 
38.7 
42.0 
44.1 
46.7 
48.9 
51.4 
52.3 

51.2 
53.4 
58.-1 

60.4 
60.9 
63.5 
70.2 
79.5 
87.8 

67.7 
69.3 
70.5 
73.2 

76.1 
78.9 
80.8 
82.3 

83.1 
86.1 
89.6 
92.4 


8.8 

3.9 

7.6 

8.6 
11.7 
14.4 
17.1 
18.3 
19.3 
23.3 
21.8 
23.1 
22.2 

25.1 
26.4 
26.9 
27.6 
27.6 
30.5 
31.8 
33.1 
33.2 
35.3 

34.2 
35.3 
36.4 
37.2 
40.2 
42.7 
45.3 
47.5 
50.4 
51.3 

50.7 
52.8 
56.4 
60.3 
62.9 
64.0 
71.4 
81.4 
91.9 

68.5 
70.6 
71.7 
74.8 

78.1 
80.6 
82.2 
84.8 

86.7 
90.1 
93.5 
97.3 


0.1 

-.5 

^.2 

-.0 

-.6 

-.4 

-.2 

-.1 

-.1 

-1.7 

-1.5 

-.4 

.5 

-1.1 
-.3 
.2 
-.2 
-.0 
-.2 
-.5 
-.3 
-.1 
-.1 

.1 
-.1 
-.0 
-.0 
-.0 
-.2 
-.3 
-.3 
-.4 
-.5 

-.5 
-.4 
-.7 
-1.7 
-3.6 
-1.2 
-1.2 
-1.3 
-2.1 

-.9 
-1.3 
-1.1 
-1.6 

-1.8 

-1.4 

-.7 

-1.3 

-2.1 
-2.2 
-1.8 
-2.3 


-0.2 


1933 


-.2 


1939 


-.1 


1940 


-.1 


1941 


-.1 


1942 


.2 


1943 


.3 


1944 


.4 


1945 


.2 


1946. 


.0 


1947 


.4 


1948 


.5 


1949 


.8 


1950 


.9 


1951 


.9 


1952 


.9 


1953 


.9 


1954 


1.0 


1955 


1.0 


1956 


1.1 


1957 


1.2 


1958 


1.1 


1959 


1.3 


1960 


1.3 


1961 


1.2 


1962 


1.4 


1963 


1.6 


1964 


1.8 


1965 


1.6 


1966 


1.6 


1967 


1.7 


1968 


1.5 


1969 


1.4 


1970 


1.0 


1971 


1.1 


1972 


2.5 


1973 


1.8 


1974 

1975 


1.6 
.6 


1976 


-.0 


1977 


-.6 


1978 " 

1976: 1 
II 
III 
IV 

1977:1 

II 

Ill 

IV 

1978: 1 
II 
III 
IV »>_... 


-2.0 

.0 
.0 
.0 
.0 

-.1 

-.3 
-.7 
-1.2 

-1.5 
-1.8 
-2.1 
-2.6 









See next page for continuation of table. 



204 



Table B-19. — National income by type oj income, 1929-78 — Continued 
[Billions of dollars; quarterly data at seasonally adjusted annual rates] 



Rental income of per- 
sons with capital 
consumption 
adjustment 



Total 



Rental 
income 

of 
persons 



Capital 
con- 
sump- 
tion 
adjust- 
ment 



Corporate profits with inventory valuation and capital consumption 
adjustments 



Total 



Profits with inventory valuation adjustment and without 
capital consumption adjustment 



Total 



Profits before tax 



Total 



Profits 

tax 
lability 



Profits after tax 



Total 



Divi- 
dends 



Undis- 
tributed 
profits 



Inven- 
tory 
valua- 
tion 
adjust- 
ment 



Capital 
con- 
sump- 
tion 
adjust- 
ment 



Net 
inter- 
est 



2.2 

2.6 

2.7 
3.1 
4.0 
4.4 
4.5 
4.6 
5.5 
5.3 
5.7 
6.1 

7.1 
7.7 
8.8 
10.0 
11.0 
11.3 
11.6 
12.2 
12.9 
13.2 

13.8 
14.3 
15.0 
15.7 
16.1 
17.1 
18.2 
19.4 
18.6 
18.1 

18.6 
20.1 
21.5 
21.6 
21.4 
22.4 
22.5 
22.5 
23.4 

22.5 
22.4 
22.4 
22.8 

22.5 

22.4 
22.4 
22.7 

22.8 
22.2 
24.3 
24.4 



5.7 

2.3 

3.1 

3.3 
3.9 
5.0 
5.6 
5.9 
6.2 
7.3 
7.7 
8.5 
8.9 

10.0 
11.0 
12.2 
13.4 
14.4 
14.8 
15.2 
15.9 
16.7 
17.3 

17.8 
18.3 
19.0 
19.6 
20.1 
21.0 
22.1 
23.4 
23.8 
24.8 

25.8 
27.7 
29.4 
31.3 
33.7 
36.9 
38.7 
42.1 
47.6 

38.1 
38.3 
38.8 
39.7 

40.4 
41.5 
42.6 
44.0 

44.6 
45.5 
49.5 
51.0 



-0.8 
-.1 



-1.0 
-1.2 
-1.4 
-1.6 
-1.8 
-2.5 
-2.8 
-2.8 

-2.9 
-3.3 
-3.4 
-3.4 
-3.3 
-3.5 
-3.6 
-3.6 
-3.8 
-4.0 

-4.1 
-4.0 
-4.0 
-3.9 
-4.0 
-3.9 
-3.9 
-4.0 
-5.2 
-6.7 

-7.1 
-7.6 
-7.9 
-9.8 
-12.3 
-14.5 
-16.2 
-19.6 
-24.2 

-15.6 
-15.9 
-16.3 
-16.9 

-17.9 

-19.0 
-20.2 
-21.3 

-21.8 
-23.3 
-25.2 
-26.6 



9.2 

-1.7 

5.3 

8.7 
14.1 
19.3 
23.5 
23.6 
19.0 
16.6 
22.2 
29.1 
26.9 

33.7 
38.1 
35.4 
35.5 
34.6 
44.6 
42.9 
42.1 
37.5 
48.2 

46.6 
46.9 
54.9 
59.6 
67.0 
77.1 
82.5 
79.3 
85.8 
81.4 

67.9 
77.2 
92.1 
99.1 
83.6 
95.9 
127.0 
144.2 
160.0 

126.8 
128.6 
130.0 
122.5 

129.9 
143.7 
154.8 
148.2 

132.6 
163.4 
165.2 



10.5 

-1.2 

6.3 

9.8 
15.2 
20.3 
24.4 
23.8 
19.2 
19.3 
25.6 
33.0 
30.8 

37.6 
42.7 
39.8 
39.5 
37.8 
46.7 
45.9 
45.4 
40.8 
51.2 

48.9 
48.7 
53.7 
57.6 
64.2 
73.3 
78.6 
75.6 
82.1 
77.9 

66.4 

76.9 

89.6 

97.2 

86.5 

107.9 

141.4 

159.1 

178.1 

141.2 
143.0 
144.5 
137.0 

144.5 
158.5 
169.9 
163.5 

148.7 
180.6 
184.5 



10.0 

1.0 

7.0 

10.0 
17.7 
21.5 
25.1 
24.1 
19.7 
24.6 
31.5 
35.2 
28.9 

42.6 
43.9 
38.9 
40.5 
38.1 
48.4 
48.6 
46.9 
41.1 
51.6 

48.5 
48.6 
53.6 
57.7 
64.7 
75.2 
80.7 
77.3 
85.6 
83.4 

71.5 
82.0 
96.2 
115.8 
126.9 
120.4 
155.9 
173.9 
202.4 

152.6 
158.7 
157.8 
154.6 

164.8 
175.1 
177.5 
178.3 

172.1 
205.5 
205.4 



1.4 
.5 
1.4 

2.8 
7.6 
11.4 
14.1 
12.9 
10.7 
9.1 
11.3 
12.4 
10.2 

17.9 
22.6 
19.4 
20.3 
17.6 
22.0 
22.0 
21.4 
19.0 
23.6 

22.7 
22.8 

24.0 
26.2 
28.0 
30.9 
33.7 
32.5 
39.4 
39.7 

34.5 
37.7 
41.5 
48.7 
52.4 
49.8 
64.3 
71.8 
84.1 

63.6 
66.3 
64.7 
62.4 

68.3 
72.3 
72.8 
73.9 

70.0 
85.0 
86.2 



8.6 

.4 

5.6 

7.2 
10.1 
10.1 
11.1 
11.2 

9.0 
15.5 
20.2 
22.7 
18.7 

24.7 
21.3 
19.5 
20.2 
20.5 
26.4 
26.6 
25.5 
22.1 
28.0 

25.8 
25.8 
29.6 
31.5 
36.7 
44.3 
47.1 
44.9 
46.2 
43.8 

37.0 
44.3 
54.6 
67.1 
74.5 
70.6 
91.7 
102.1 
118.3 

89.0 
92.4 
93.1 
92.2 

96.5 
102.8 

104.8 
104.4 

102.1 
120.5 
119.2 



5.8 

2.0 

3.8 

4.0 
4.4 
4.3 
4.4 
4.6 
4.6 
5.6 
6.3 
7.0 
7.2 

8.8 

8.5 
8.5 
8.8 
9.1 
10.3 
11.1 
11.5 
11.3 
12.2 

12.9 
13.3 
14.4 
15.5 
17.3 
19.1 
19.4 
20.1 
21.9 
22.6 

22.9 
23.0 
24.6 
27.8 
31.0 
31.9 
37.9 
43.7 
49.3 

34.5 
37.2 
38.4 
41.4 

41.5 
42.7 
44.1 
46.3 

47.0 
48.1 
50.1 
51.9 



2.8 

-1.6 

1.8 

3.2 
5.7 
5.9 
6.6 
6.5 
4.4 
9.9 
13.9 
15.7 
11.5 

15.9 
12.8 
11.0 
11.5 
11.4 
16.1 
15.5 
14.0 
10.8 
15.8 

13.0 
12.5 
15.2 
16.0 
19.4 
25.2 
27.6 
24.7 
24.2 
21.2 

14.1 
21.3 
30.0 
39.3 
43.6 
38.7 
53.8 
58.4 
69.1 

54.5 
55.2 
54.7 
50.8 

55.0 
60.1 
60.6 
58.1 

55.1 

72.4 
69.2 



0.5 

-2.1 

-.7 

-.2 

-2.5 

-1.2 

-.8 

-.3 

-.6 

-5.3 

-5.9 

-2.2 

1.9 

-5.0 

-1.2 

1.0 

-1.0 

-.3 

-1.7 

-2.7 

-1.5 

-.3 

-.5 

.3 

.1 

.1 

-.2 

-.5 

-1.9 

-2.1 

-1.7 

-3.4 

-5.5 

-5.1 
-5.0 
-6.6 
-18.6 
-40.4 
-12.4 
-14.5 
-14.8 
-24.3 

-11.4 
-15.7 
-13.3 
-17.6 

-20.3 
-16.6 
-7.7 
-14.8 

-23.5 
-24.9 
-20.9 
-27.8 



-1.3 

-.5 

-1.0 

-1.1 

-1.1 

-1.0 

-.8 

-.2 

-. 1 

-2.7 

-3.4 

-3.9 

-3.8 

-4.0 
-4.6 
-4.5 
-4.1 
-3.2 
-2.1 
-3.0 
-3.3 
-3.4 
-2.9 

-2.3 
-1.8 
1.2 
2.1 
2.8 
3.8 
3.9 
3.7 
3.7 
3.5 

1.5 

.3 

2.5 

1.9 

-2.9 

-12.0 

-14.4 

-14.9 

-18.1 

-14.4 
-14.4 
-14.5 
-14.5 

-14.6 
-14.8 
-15.0 
-15.3 

-16.1 
-17.2 
-19.3 
-19.9 



4.7 

4.1 

3.6 

3.3 
3.3 
3.1 
2.7 
2.4 
2.2 
1.6 
2.1 
2.1 
2.2 

2.3 
2.7 
3.0 
3.4 
4.3 
4.8 
5.2 
6.5 
8.0 
8.8 

9.8 
11.2 
12.8 
14.3 
15.9 
18.5 
21.9 
24.3 
26.8 
30.8 

37.5 
42.8 
47.0 
52.3 
69.0 
78.6 
84.3 
95.4 
106.1 

80.1 
82.0 
86.2 
88.9 

91.7 
93.7 
97.3 
99.0 

101.7 
104.6 

107.4 
110.8 



1 National income is the total net income earned in production. It differs from gross national product mainly in that it 
excludes depreciation charges and other allowances for business and institutional consumption of durable capital goods 
and indirect business taxes. See Table B-17. 

2 Employer contributions for social insurance and to private pension, health, and welfare funds; workmen's 
compensation; directors' fees; and a few other minor items. 

1 With inventory valuation adjustment and without capital consumption adjustment. 
4 Without inventory valuation and capital consumption adjustments. 

Source: Department of Commerce, Bureau of Economic Analysis. 



205 



Table B-20. — Sources of personal income, 1929-78 
[Billions of dollars; quarterly data at seasonally adjusted annual rates] 





Per- 
sonal 
income 


Wage and salary disbursements! 


Other 
labor 
in- 
come 1 


Proprie 
come wi 
toryvalu 
capital c 
tion adj 


lors' in- 
th inven- 


Year or quarter 


Total 


Commodity- 
producing 
industries 


Distrib- 
utive 

indus- 
tries 


Service 
indus- 
tries 


Govern- 
ment 
and 

govern- 
ment 
enter- 
prises 


ationand 
onsump- 
istments 




Farm 






Total 


Manu- 
factur- 
ing 


Non- 
farm 


1929. 


84.9 

46.9 

72.4 

77.8 
95.3 
122.4 
150.7 
164.4 
169.8 
177.3 
189.8 
208.5 
205.6 

226.1 
253.7 
270.4 
286.1 
288.2 
308.8 
330.9 
349.3 
359.3 
382.1 

399.7 
415.0 
440.7 
463.1 
495.7 
537.0 
584.9 
626.6 
685.2 
745.8 

801.3 
859.1 
942.5 
1,052.4 
1,154.9 
1,255.5 
1,380.9 
1, 529. 
1, 707. 3 

1,336.9 
1, 363. 2 
1, 392. 8 
1, 430. 5 

1, 470. 7 
1, 508. 6 
1, 543. 7 
1, 593. 

1,628.9 
1, 682. 4 
1,731.7 
1,786.4 


50.5 

29.0 

46.0 

49.9 
62.1 
82.1 
105.6 
116.9 
117.5 
112.0 
123.1 
135.5 
134.8 

147.0 
171.3 
185.4 
198.6 
196.8 
211.7 
228.3 
239.3 
240.5 
258.9 

271.9 
279.5 
298.0 
313.4 
336.1 
362.0 
398.4 
427.5 
469.5 
514.6 

546.5 
579.4 
633.8 
701.3 
764.6 
805.9 
890.1 
983.6 
1, 100. 7 

861.7 
881.5 
897.3 
919.9 

946.4 

973.4 

993.6 

1,021.2 

1,050.8 
I, 090. 2 
1,113.2 
1, 148. 5 


21.5 

9.8 

17.4 

19.7 
27.5 
39.1 
49.0 
50.4 
45.9 
46.0 
54.2 
61.1 
57.8 

64.8 
76.3 
82.0 
89.6 
85.7 
93.1 
100.6 
104.2 
100.0 
109.6 

113.1 
113.7 
121.8 
126.9 
135.4 
146.0 
161.0 
168.3 
183.4 
199.6 

202.9 
208.3 
227.3 
254.3 
274.6 
275.0 
307.5 
343.7 
390.1 

298.4 
305.4 
309.8 
316.2 

327.3 
342.0 
348.3 
357.1 

365.9 
387.0 
396.4 
410.8 


16.1 

7.8 

13.6 

15.6 
21.7 
30.9 
40.9 
42.9 
38.2 
36.5 
42.5 
47.1 
44.6 

50.3 
59.3 
64.1 
71.2 
67.5 
73.8 
79.4 
82.4 
78.6 
86.8 

89.7 
89.8 
96.7 
100.6 
107.1 
115.5 
128.0 
134.1 
145.8 
157.5 

158.2 
160.3 
175.4 
196.2 
211.4 
211.0 
237.5 
266.3 
299.7 

230.2 
235.8 
239.5 
244.6 

254.6 
264.1 
269.3 
277.3 

286.9 
296.1 
302.0 
313.6 


15.6 

8.8 

13.3 

14.2 
16.3 
18.0 
20.1 
22.7 
24.8 
31.0 
35.2 
37.5 
37.7 

39.8 
44.3 
46.9 
49.7 
50.1 
53.4 
57.7 
60.5 
60.8 
64.8 

68.2 
69.3 
72.8 
76.3 
81.4 
87.2 
94.4 
100.9 
109.9 
120.7 

130.1 
139.3 
151.9 
168.1 
184.3 
195.3 
216.4 
239.1 
268.7 

208.6 
213.9 
218.9 
224.4 

231.2 
236.5 
241.2 
247.5 

257.0 
266.4 
271.6 
279.9 


8.4 

5.2 

7.1 

7.5 

8.1 

9.0 

9.9 

10.9 

11.9 

14.3 

16.1 

17.9 

18.5 

19.8 
21.5 
23.1 
24.9 
26.1 
28.6 
31.3 
33.6 
35.6 
38.5 

41.4 
44.1 
47.2 
50.2 
54.4 
58.9 
64.7 
71.8 
79.8 
89.4 

97.5 
106.2 
117.2 
130.3 
145.1 
160.1 
178.6 
200.1 
225.8 

171.0 
176.1 
180.5 
186.6 

192.7 
196.8 
202.3 
208.5 

216.5 
222.8 
228.5 
235.6 


5.0 
5.2 
8.2 

8.5 

10.2 
16.0 
26.6 
33.0 
34.9 
20.7 
17.5 
19.0 
20.8 

22.6 
29.2 
33.3 
34.4 
34.9 
36.6 
38.8 
41.0 
44.1 
46.0 

49.2 
52.4 
56.3 
60.0 
64.9 
69.9 
78.3 
86.4 
96.4 
104.9 

116.0 
125.6 
137.3 
148.6 
160.5 
175.4 
187.6 
200.8 
216.1 

183.7 
186.1 
188.1 
192.6 

195.2 
198.1 
201.7 
208.1 

211.4 
213.9 
216.7 
222.2 


0.5 

.4 

.6 

.6 
.7 
.9 
1.1 
1.5 
1.8 
2.0 
2.4 
2.7 
2.9 

3.7 
4.6 
5.2 
5.9 
6.1 
7.0 
8.0 
9.0 
9.4 
10.6 

11.2 
11.8 
13.0 
14.0 
15.7 
17.8 
19.9 
21.7 
25.1 
28.2 

32.0 
36.2 
42.0 
48.7 
55.6 
65.1 
77.0 
90.4 
105.9 

72.4 
75.5 
78.6 
81.6 

84.9 
88.5 
92.2 
96.1 

100.0 
104.0 
107.9 
111.8 


6.2 
2.6 

4.4 

4.5 
6.4 
9.8 
11.7 
11.6 
12.2 
14.9 
15.2 
17.5 
12.7 

13.5 
15.8 
14.9 
12.9 
12.3 
11.3 
11.2 
11.0 
13.1 
10.7 

11.4 
11.8 
11.9 
11.6 
10.3 
12.6 
13.6 
12.1 
12.0 
13.9 

13.9 
14.3 
18.0 
32.0 
25.4 
23.5 
18.4 
20.2 
25.1 

20.9 
19.6 
16.9 
16.3 

19.4 
20.0 
16.5 
25.1 

21.9 
24.0 
25.0 
29.5 


8.8 


1933 


3.2 


1939 


7.3 


1940 


8.4 


1941 


10.9 


1942 


14.3 


1943 


17.3 


1944 


18.6 


1945 


19.4 


1946 


21.6 


1947 


20.6 


1948 


23.2 


1949 


23.5 


1950 


24.9 


1951 


27.0 


1952 


28.0 


1953 


28.4 


1954 


28.5 


1955 


31.2 


1956 


32.4 


1957 


33.9 


1958 


34.3 


1959 


36.6 


1960 


35.6 


1961 


36.4 


1962 


37.7 


1963 


38.7 


1964 


42.0 


1965 


44.1 


1966 


46.7 


1967 


48.9 


1968 


51.4 


1969 


52.3 


1970 


51.2 


1971 


53.4 


1972 


58.1 


1973 


60.4 


1974 


60.9 


1975.... 


63.5 


1976 


70.2 


1977 


79.5 


1978 p 


87.8 


1976: 1 


67.7 


II 


69.3 


III. 


70.5 


IV 

1977:1 


73.2 
76.1 


II 


78.9 


Ill 


80.8 


IV. 


82.3 


1978:1 


83.1 


II 


86.1 


Ill 


89.6 


IV» 


92.4 







See next page for continuation of table. 



206 



Table B-20. — Sources of personal income, 1929-78 — Continued 
[Billions of dollars; quarterly data at seasonally adjusted annual rates) 





Rental 
income 
of per- 






Transfer payments 


Less: 
Personal 




















Non- 


Year or 
quarter 


sons 
with 
capital 
con- 
sump- 
tion ad- 
just- 
ment 


Divi- 
dends 


Personal 
interest 
income 


Total 


Old age, 
survivors, 
disability, 
and health 
insurance 

benefits 


Govern- 
ment 
unem- 
ploy- 
ment in- 
surance 
benefits 


Vet- 
erans 
bene- 
fits 


Govern- 
ment 
em- 
ployee 
retire- 
ment 
benefits 


Aid to 
families 
with de- 
pendent 
children 
(AFDC) 


Other 


contri- 
butions 
for 
social 
insur- 
ance 


farm 
per- 
sonal 
in- 
come > 


1929.... 


4.9 


5.8 


6.9 


1.5 






0.6 


0.1 


0.8 


0.1 




1933.... 


2.2 


2.0 


5.5 


2.1 






.6 


.2 


1.4 


.2 




1939.... 


2.6 


3.8 


5.4 


3.0 


0.0 


0.4 


.5 


.3 


1.7 


.6 




1940.... 


2.7 


4.0 


5.3 


3.1 


.0 


.5 


.5 


.3 


1.7 


.7 




1941.... 


3.1 


4.4 


5.3 


3.1 


.1 


.4 


.5 


.3 


1.8 


.8 




1942.... 


4.0 


4.3 


5.2 


3.1 


.1 


.4 


.5 


.3 


1.8 


1.2 




1943.... 


4.4 


4.4 


5.1 


3.0 


.2 


.1 


.5 


.4 


1.8 


1.8 




1944.... 


4.5 


4.6 


5.2 


3.6 


.2 


.1 


1.0 


.4 


2.0 


2.2 




1945.... 


4.6 


4.6 


5.9 


6.2 


.3 


.4 


3.0 


.5 


2.0 


2.3 




1946.... 


5.5 


5.6 


6.4 


11.3 


.4 


1.1 


7.0 


.7 


2.1 


2.0 


159.6 


1947.... 


5.3 


6.3 


7.3 


11.7 


.5 


.8 


7.0 


.7 


.3 


2.5 


2.1 


171.5 


1948.... 


5.7 


7.0 


7.7 


11.3 


.6 


.9 


5.9 


.7 


.4 


2.9 


2.2 


187.7 


1949.... 


6.1 


7.2 


8.2 


12.5 


.7 


1.9 


5.3 


.9 


.5 


3.3 


2.2 


189.9 


1950.... 


7.1 


8.8 


8.9 


15.2 


1.0 


1.5 


7.7 


1.0 


.6 


3.5 


2.9 


209.3 


1951.... 


7.7 


8.5 


9.6 


12.6 


1.9 


.9 


4.6 


1.1 


.6 


3.6 


3.4 


234.4 


1952.... 


8.8 


8.5 


10.3 


13.1 


2.2 


1.1 


4.3 


1.2 


.5 


3.8 


3.8 


252.0 


1953.... 


10.0 


8.8 


11.4 


14.1 


3.0 


1.0 


4.1 


1.4 


.5 


4.1 


4.0 


269.9 


1954.... 


11.0 


9.1 


12.7 


16.2 


3.6 


2.2 


4.2 


1.5 


.6 


4.1 


4.6 


272.7 


1955.... 


11.3 


10.3 


13.8 


17.5 


4.9 


1.5 


4.4 


1.7 


.6 


4.3 


5.2 


294.3 


1956.... 


11.6 


11.1 


15.3 


18.7 


5.7 


1.5 


4.4 


1.9 


.6 


4.5 


5.8 


316.4 


1957.... 


12.2 


11.5 


17.4 


21.6 


7.3 


1.9 


4.5 


2.2 


.7 


4.9 


6.7 


335.0 


1958.... 


12.9 


11.3 


18.8 


25.9 


8.5 


4.1 


4.7 


2.5 


.8 


5.3 


6.9 


342.6 


1959.... 


13.2 


12.2 


20.9 


27.0 


10.2 


2.8 


4.6 


2.8 


.9 


5.8 


7.9 


367.7 


I960.... 


13.8 


12.9 


23.3 


28.9 


11.1 


3.0 


4.6 


3.1 


1.0 


6.2 


9.3 


384.4 


1961.... 


14.3 


13.3 


24.6 


32.8 


12.6 


4.3 


5.0 


3.4 


1.1 


6.4 


9.7 


399.0 


1962.... 


15.0 


14.4 


27.1 


33.8 


14.3 


3.1 


4.7 


3.7 


1.3 


6.7 


10.3 


424.5 


1963.... 


15.7 


15.5 


30.2 


35.8 


15.2 


3.0 


4.8 


4.2 


1.4 


7.3 


11.8 


447.0 


1964.... 


16.1 


17.3 


33.3 


37.4 


16.0 


2.7 


4.7 


4.7 


1.5 


7.8 


12.6 


480.7 


1965.... 


17.1 


19.1 


37.2 


40.4 


18.1 


2.3 


4.9 


5.2 


1.7 


8.3 


13.3 


519.5 


1966.... 


18.2 


19.4 


41.8 


44.7 


20.8 


1.9 


4.9 


6.1 


1.9 


9.2 


17.8 


566.1 


1967.... 


19.4 


20.1 


45.0 


52.6 


25.5 


2.2 


5.6 


6.9 


2.3 


10.2 


20.6 


609.1 


1968.... 


18.6 


21.9 


49.6 


59.9 


30.2 


2.1 


5.9 


7.7 


2.8 


11.1 


22.8 


667.5 


1969.... 


18.1 


22.6 


55.9 


66.5 


32.9 


2.2 


6.7 


8.6 


3.5 


12.5 


26.3 


725.8 


1970.... 


18.6 


22.9 


64.3 


79.9 


38.5 


4.0 


7.7 


10.1 


4.8 


14.9 


28.0 


780.7 


1971.... 


20.1 


23.0 


69.3 


94.1 


44.5 


5.8 


8.8 


11.7 


6.2 


17.2 


30.8 


838.0 


1972.... 


21.5 


24.6 


74.6 


104.1 


49.6 


5.6 


9.7 


13.5 


6.9 


18.9 


34.2 


917.3 


1973.... 


21.6 


27.8 


84.1 


118.9 


60.4 


4.3 


10.4 


15.6 


7.2 


21.0 


42.2 


1,011.9 


1974.... 


21.4 


31.0 


103.0 


140.8 


70.1 


6.6 


11.8 


18.8 


7.9 


25.5 


47.7 


1,119.3 


1975.... 


22.4 


31.9 


115.5 


178.2 


81.4 


17.4 


14.5 


22.7 


9.2 


33.0 


50.5 


1,220.8 


1976.... 


22.5 


37.9 


126.3 


193.9 


92.9 


15.5 


14.4 


25.7 


10.1 


35.5 


55.5 


1,349.5 


1977.... 


22.5 


43.7 


141.2 


208.8 


105.0 


12.5 


13.8 


28.8 


10.6 


38.1 


61.0 


1, 494. 4 


1978"... 


23.4 


49.3 


158.9 


226.0 


117.3 


8.9 


13.6 


32.8 


10.8 


42.5 


69.7 


1, 666. 5 


1976:1 .. 


22.5 


34.5 


121.0 


190.3 


88.0 


17.0 


15.8 


24.5 


9.7 


35.1 


54.2 


1, 303. 8 


II.. 


22.4 


37.2 


123.5 


189.3 


89.3 


14.8 


14.3 


25.7 


10.0 


35.2 


55.0 


1, 330. 9 


III. 


22.4 


38.4 


128.2 


196.3 


95.8 


15.2 


13.4 


26.1 


10.2 


35.5 


55.9 


1,362.7 


IV. 


22.8 


41.4 


132.5 


199.7 


98.3 


14.8 


13.8 


26.5 


10.3 


36.1 


56.8 


1, 400. 6 


1977:1.. 


22.5 


41.5 


135.9 


203.4 


99.7 


14.8 


14.3 


27.2 


10.4 


37.0 


59.4 


1,437.5 


II.. 


22.4 


42.7 


139.1 


204.0 


101.8 


12.0 


13.8 


28.4 


10.5 


37.4 


60.5 


1,474.4 


III. 


22.4 


44.1 


143.6 


211.9 


108.5 


11.4 


13.4 


29.2 


10.6 


38.7 


61.4 


1,512.8 


IV. 


22.7 


46.3 


146.0 


215.9 


110.1 


11.5 


13.7 


30.5 


10.7 


39.4 


62.6 


1,552.9 


1978:1.. 


22.8 


47.0 


151.4 


219.2 


112.1 


10.4 


13.8 


31.3 


10.7 


40.9 


67.2 


1,591.8 


II.. 


22.2 


48.1 


156.3 


220.6 


113.7 


8.5 


13.5 


32.5 


10.8 


41.6 


69.2 


1, 642. 8 


III. 


24.3 


50.1 


161.7 


230.4 


121.1 


8.7 


13.3 


33.2 


10.9 


43.3 


70.5 


1, 690. 8 


IV * 


24.4 


51.9 


166.3 


233.6 


122.4 


8.0 


13.7 


34.4 


10.8 


44.4 


72.0 


1, 740. 6 



1 The total of wage and salary disbursements and other labor income differs from compensation of employees in Table 
B-19 in that it excludes employer contributions for social insurance and the excess of wage accruals over wage disburse- 
ments. 

' Personal income exclusive of farm proprietors' income, farm wages, other farm labor income, and agricultural net 
interest. 

Note.— The industry classification of wage and salary disbursements and proprietors' income is on an establishment 
basis and is based on the 1972 Standard Industrial Classification (SIC) beginning 1948 and on the 1942 SIC prior to 1948. 

Source: Department of Commerce, Bureau of Economic Analysis. 



207 



Table B-21. — Disposition of personal income, 1929-78 
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates] 











Less: Personal outlays 




Percent of disposable 
personal income 






Less: 




















Year or 


Per- 
sonal 
income 


Per- 
sonal 
tax 
and 
nontax 
pay- 
ments 


Equals: 
Dispos- 
able 
per- 
sonal 
income 


Total 


Per- 
sonal 
con- 
sump- 
tion 
expend- 


Interest 
paid by 

con- 
sumers 
to 

busi- 


Per- 
sonal 
transfer 
pay- 
ments 
to for- 


Equals: 
Per- 
sonal 
saving 


Personal 
outlays 






Total 


Con- 
sump- 
tion 


Per- 
sonal 
saving 












itures 


ness 


(net) 






expend- 
itures 




1929. 


84.9 


2.6 


82.3 


79.1 


77.3 


1.5 


0.3 


3.1 


96.2 


93.9 


3.8 


1933 


46.9 


1.4 


45.5 


46.5 


45.8 


.5 


.2 


-1.0 


102.2 


100.7 


-2.2 


1939 


72.4 


2.4 


69.9 


67.8 


67.0 


.7 


.2 


2.1 


97.0 


95.8 


3.0 


1940. 


77.8 


2.6 


75.2 


72.0 


71.0 


.8 


.2 


3.3 


95.6 


94.3 


4.4 


1941 _ 


95.3 


3.3 


92.0 


81.8 


80.8 


.9 


.2 


10.2 


88.9 


87.7 


11.1 


1942 _ 


122.4 


5.9 


116.5 


89.4 


88.6 


.7 


.1 


27.0 


76.8 


76.1 


23.2 


1943 


150.7 


17.8 


132.9 


100.1 


99.4 


.5 


.2 


32.7 


75.4 


74.8 


24.6 


1944. 


164.4 


18.9 


145.5 


109.0 


108.2 


.5 


.4 


36.5 


74.9 


74.4 


25.1 


1945 


169.8 


20 8 


149.0 


120.4 


119.5 


.5 


.5 


28.5 


80.8 


80.2 


19.2 


1946 


177.3 


18.7 


158.6 


145.2 


143.8 


.7 


.7 


13.4 


91.5 


90.6 


8.5 


1947 


189.8 


21.4 


168.4 


163.5 


161.7 


1.0 


.7 


4.9 


97.1 


96.1 


2.9 


1948 


208.5 


21.0 


187.4 


176.9 


174.7 


1.4 


.7 


10.6 


94.3 


93.2 


5.7 


1949 


205.6 


18.5 


187.1 


180.4 


178.1 


1.7 


.5 


6.7 


96.4 


95.2 


3.6 


1950 


226.1 


20.6 


205.5 


194.7 


192.0 


2.3 


.4 


10.8 


94.7 


93.4 


5.3 


1951 


253.7 


28.9 


224.8 


210.0 


207.1 


2.5 


.4 


14.8 


93.4 


92.1 


6.6 


1952 


270.4 


34.0 


236.4 


220.4 


217.1 


2.9 


.4 


16.0 


93.2 


91.8 


6.8 


1953 


286.1 


35.5 


250.7 


233.7 


229.7 


3.6 


.5 


17.0 


93.2 


91.6 


6.'8 


1954 


288.2 


32.5 


255.7 


240.1 


235.8 


3.8 


.5 


15.6 


93.9 


92.2 


6.1 


1955 


308.8 


35.4 


273.4 


258.5 


253.7 


4.4 


.4 


14.9 


94.6 


92.8 


5.4 


1956 


330.9 


39.7 


291.3 


271.6 


266.0 


5.1 


.5 


19.7 


93.2 


91.3 


6.8 


1957 


349.3 


42.4 


306.9 


286.4 


280.4 


5.5 


.5 


20.6 


93.3 


91.4 


6.7 


1958 


359.3 


42.1 


317.1 


295.4 


289.5 


5.6 


.4 


21.7 


93.2 


91.3 


6.8 


1959 


382.1 


46.0 


336.1 


317.3 


310.8 


6.1 


.4 


18.8 


94.4 


92.5 


5.6 


1960 


399.7 


50.4 


349.4 


332.3 


324.9 


7.0 


.4 


17.1 


95.1 


93.0 


4.9 


1961 


415.0 


52.1 


362.9 


342.7 


335.0 


7.3 


.4 


20.2 


94.4 


92.3 


5.6 


1962 _ 


440.7 


56.8 


383.9 


363.5 


355.2 


7.8 


.5 


20.4 


94.7 


92.5 


5.3 


1963 


463.1 


60.3 


402.8 


384.0 


374.6 


8.8 


.6 


18.8 


95.3 


93.0 


4.7 


1964 


495.7 


58.6 


437.0 


410.9 


400.4 


9.9 


.6 


25.1 


94.0 


91.6 


6.0 


1965 


537.0 


64.9 


472.2 


441.9 


430. 2 


11.1 


.7 


30.3 


93.6 


91.1 


6.4 


1966 


584.9 


74.5 


510.4 


477.4 


464.8 


12.0 


.6 


33.0 


93.5 


91.1 


6.5 


1967 


626.6 


82.1 


544.5 


503.7 


490.4 


12.5 


.9 


40.9 


92.5 


90.0 


7.5 


1968 


685.2 


97.1 


588.1 


550.1 


535.9 


13.3 


.8 


38.1 


93.5 


91.1 


6.5 


1969 


745.8 


115.4 


630.4 


595.3 


579.7 


14.7 


.9 


35.1 


94.4 


92.0 


5.6 


1970 


801.3 


115.3 


685.9 


635.4 


618.8 


15.5 


1.1 


50.6 


92.6 


90.2 


7.4 


1971 


859.1 


116.3 


742.8 


685.5 


668.2 


16.2 


1.1 


57.3 


92.3 


90.0 


7.7 


1972 


942.5 


141.2 


801.3 


751.9 


733.0 


17.9 


1.0 


49.4 


93.8 


91.5 


6.2 


1973 _. 


1,052.4 


150.8 


901.7 


831.3 


809.9 


20.2 


1.3 


70.3 


92.2 


89.8 


7.8 


1974 


1,154.9 


170.3 


984.6 


913.0 


889.6 


22.4 


1.0 


71.7 


92.7 


90.3 


7.3 


1975 


1, 255. 5 


168.8 


1, 086. 7 


1, 003. 


979.1 


23.0 


.9 


83.6 


92.3 


90.1 


7.7 


1976 


1, 380. 9 


196.5 


1,184.4 


1,116.3 


1, 090. 2 


25.1 


.9 


68.0 


94.3 


92.1 


5.7 


1977 


1, 529. 


226.0 


1, 303. 


1, 236. 1 


1,206.5 


28.6 


1.0 


66.9 


94.9 


92.6 


5.1 


1978 » 


1, 707. 3 


256.2 


1,451.2 


1,374.4 


1, 339. 7 


33.8 


1.0 


76.7 


94.7 


92.3 


5.3 


1976: L... 


1, 336. 9 


184.4 


1,152.5 


1, 078. 9 


1, 053. 8 


24.1 


1.0 


73.6 


93.6 


91.4 


6.4 


II... 


1, 363. 2 


192.6 


1,170.6 


1, 100. 7 


1, 075. 1 


24.8 


.9 


69.9 


94.0 


91.8 


6.0 


III... 


1, 392. 8 


200.0 


1,192.8 


1,124.8 


1,098.4 


25.5 


.9 


68.1 


94.3 


92.1 


5.7 


IV... 


1, 430. 5 


209.0 


1,221.5 


1,160.9 


1,133.7 


26.2 


1.0 


60.7 


95.0 


92.8 


5.0 


1977: 1.... 


1,470.7 


222.7 


1, 248. 


1,195.8 


1,167.7 


27.1 


1.0 


52.2 


95.8 


93.6 


4.2 


II... 


1, 508. 6 


223.3 


1, 285. 3 


1,217.8 


1,188.6 


28.2 


1.0 


67.5 


94.7 


92.5 


5.3 


Ill— 


1, 543. 7 


224.6 


1,319.1 


1, 244. 8 


1,214.5 


29.3 


.9 


74.3 


94.4 


92.1 


5.6 


IV... 


1, 593. 


233.3 


1,359.6 


1, 285. 9 


1,255.2 


29.8 


.9 


73.7 


94.6 


92.3 


5.4 


1978: l.__. 


1, 628. 9 


237.3 


1,391.6 


1, 309. 2 


1, 276. 7 


31.5 


1.0 


82.4 


94.1 


91.7 


5.9 


II... 


1, 682. 4 


249.1 


1, 433. 3 


1,357.0 


1,322.9 


33.0 


1.1 


76.3 


94.7 


92.3 


5.3 


III... 


1,731.7 


263.2 


1, 468. 4 


1, 392. 5 


1, 356. 9 


34.6 


.9 


76.0 


94.8 


92.4 


5.2 


IV p.. 


1, 786. 4 


275.0 


1,511.4 


1,439.2 


1,402.2 


36.0 


1.0 


72.3 


95.2 


92.8 


4.8 



Source: Department of Commerce, Bureau of Economic Analysis. 



208 



Table B-22. — Total and per capita disposable personal income and personal consumption expendi- 
tures in current and 1972 dollars, 1929-78 

[Quarterly data at seasonally adjusted annual rates, except as noted) 





Disposable personal income 


Personal consumption expenditures 




Year or quarter 


Total (billions 
of dollars) 


Per capita 
(dollars) 


Total (billions 
of dollars) 


Per capita 
(dollars) 

Current 1972 
dollars dollars 


Popu- 
lation 
(thou- 
sands) 1 




Current 
dollars 


1972 
dollars 


Current 
dollars 


1972 
dollars 


Current 
dollars 


1972 
dollars 




1929 


82.3 

45.5 

69.9 

75.2 
92.0 
116.5 
132.9 
145.5 
149.0 
158.6 
168.4 
187.4 
187.1 

205.5 
224.8 
236.4 
250.7 
255.7 
273.4 
291.3 
306.9 
317.1 
336.1 

349.4 
362.9 
383.9 
402.8 
437.0 
472.2 
510.4 
544.5 
588.1 
630.4 

685.9 

742.8 

801.3 

901.7 

984.6 

1, 086. 7 

1,184.4 

1, 303. 

1,451.2 

1,152.5 
1, 170. 6 
1,192.8 
1,221.5 

1, 248. 
1,285.3 
1, 319. 1 
1, 359. 6 

1,391.6 
1, 433. 3 
1, 468. 4 
1,511.4 


229.8 

169.7 

230.1 

244.3 
278.1 
317.3 
332.2 
343.9 
338.6 
332.4 
318.8 
335.5 
336.1 

361.9 
371.6 
382.1 
397.5 
402.1 
425.9 
444.9 
453.9 
459.0 
477.4 

487.3 
500.6 
521.6 
539.2 
577.3 
612.4 
643.6 
669.8 
695.2 
712.3 

741.6 
769.0 
80J.3 
854.7 
842.0 
859.7 
890.1 
926.3 
965.5 

881.8 
886.3 
891.5 
900.9 

904.8 
918.6 
931.9 
949.6 

952.1 
960.3 
968.7 
980.9 


675 

362 

534 

570 

690 

863 

972 

1,051 

1,065 

1,122 

1,168 

1,278 

1,254 

1,355 
1,457 
1,506 
1,571 
1,574 
1,654 
1,731 
1,792 
1,821 
1,898 

1,934 
1,976 
2,058 
2,128 
2,278 
2,430 
2,597 
2,740 
2,930 
3,111 

3,348 
3,588 
3,837 
4,285 
4,646 
5,088 
5,504 
6,009 
6,640 

5,370 
5,446 
5,538 
5,660 

5,772 
5,934 
6,077 
6,250 

6,387 
6,566 
6,712 
6,893 


1,886 

1,350 

1,756 

1,849 
2,084 
2,353 
2,429 
2,485 
2,420 
2,351 
2,212 
2,288 
2,253 

2,386 
2,408 
2,434 
2,491 
2,476 
2,577 
2,643 
2,650 
2,636 
2,696 

2,697 
2,725 
2,796 
2,849 
3,009 
3,152 
3,274 
3,371 
3,464 
3,515 

3,619 
3,714 
3,837 
4,062 
3,973 
4,025 
4,136 
4,271 
4,418 

4,109 
4,124 
4,139 
4,174 

4,185 
4,241 
4,293 
4,365 

4,370 
4,399 
4,428 
4,474 


77.3 
45.8 

67.0 

71.0 
80.8 
88.6 
99.4 
108.2 
119.5 
143.8 
161.7 
174.7 
178.1 

192.0 
207.1 
217.1 
229.7 
235.8 
253.7 
266.0 
280.4 
289.5 
310.8 

324.9 
335.0 
355.2 
374.6 
400.4 
430.2 
464.8 
490.4 
535.9 
579.7 

618.8 

668.2 

733.0 

809.9 

889.6 

979.1 

1,090.2 

1, 206. 5 

1, 339. 7 

1, 053. 8 
1,075.1 
1, 098. 4 
1,133.7 

1,167.7 
1,188.6 
1,214.5 
1,255.2 

1, 276. 7 
1,322.9 
1, 356. 9 
1, 402. 2 


215.6 

170.7 

220.3 

230.4 
244.1 
241.7 
248.7 
255.7 
271.4 
301.4 
306.2 
312.8 
320.0 

338.1 
342.3 
350.9 
364.2 
370.9 
395.1 
406.3 
414.7 
419.0 
441.5 

453.0 
462.2 
482.9 
501.4 
528.7 
558.1 
586.1 
603.2 
633.4 
655.4 

668.9 
691.9 
733.0 
767.7 
760.7 
774.6 
819.4 
857.7 
891.2 

806.3 
814.0 
820.9 
836.2 

846.6 
849.5 
858.0 
876.6 

873.5 
886.3 
895.1 
910.0 


634 
364 
511 

537 

605 

657 

727 

781 

854 

1,017 

1,122 

1,192 

1,194 

1,266 
1,342 
1,383 
1,439 
1,452 
1,535 
1,581 
1,637 
1,662 
1,755 

1,798 
1,824 
1,904 
1,979 
2,087 
2,214 
2,365 
2,468 
2,670 
2,860 

3,020 
3,227 
3,510 
3,849 
4,197 
4,584 
5,066 
5,564 
6,130 

4,910 
5,002 
5,100 
5,253 

5,401 
5,487 
5,595 
5,770 

5,859 
6,060 
6,203 
6,395 


1,769 

1,358 

1,681 

1,744 
1,830 
1,792 
1,819 
1,847 
1,939 
2,131 
2,124 
2,133 
2,145 

2,229 
2,219 
2,236 
2,283 
2.284 
2,391 
2,415 
2,421 
2,406 
2,493 

2,507 
2,516 
2,589 
2,649 
2,755 
2,872 
2,982 
3,035 
3,156 
3,234 

3,265 
3,342 
3,510 
3,648 
3,589 
3,627 
3,808 
3,955 
4,078 

3,757 
3,787 
3,812 
3,874 

3,916 
3,922 
3,953 
4,030 

4,009 
4,060 
4,092 
4,150 


121,875 


1933 


125,690 


1939 


131,028 


1940 


132,122 


1941 


133, 402 


1942 


134, 860 


1943 


136, 739 


1944 


138,397 


1945 


139,928 


1946 


141,389 


1947 


144, 126 


1948 


146, 631 


1949 


149, 188 


1950 


151,684 


1951 


154, 287 


1952 


156, 954 


1953 


159, 565 


1954 


162, 391 


1955 


165,275 


1956 


168, 221 


1957 


171,274 


1958 


174,141 


1959 


177,073 


I960 


i 180,671 
183,691 


1961 


1962 


186, 538 


1963 


189,242 


1964 


191, 889 


1965 


194, 303 


1966 


196, 560 


1967 


198,712 


1968 


200, 706 


1969 


202,677 


1970 


204, 878 


1971 


207, 053 


1972 


208, 846 


1973 


210,410 


1974 


211,945 


1975 


213, 566 


1976 


215, 191 


1977 


216,856 


1978 " 


218,554 


1976: 1 


214,608 


II 


214,948 


III 


215, 380 


IV 


215,827 


1977: 1 


216, 206 


II 


216,603 


Ill 


217,073 


IV 


217,541 


1978: 1 


217,897 


II... 


218, 290 


Ill 


218, 768 


IV » 


219, 259 







' Population of the United States including Armed Forces overseas; includes Alaska and Hawaii beginning 1960. Annual 
data are for July 1 through 1973 and are averages of quarterly data beginning 1974. Quarterly data are average for the 
period. 

Source: Department of Commerce (Bureau of Economic Analysis and Bureau of the Census). 



209 



Table B-23. — Gross saving and investment, 1929-78 
[Billions of dollars; quarterly data at seasonally adjusted annual rates] 











Gross saving 






Gross investment 












Government surplus or 












Yeai or 
quaiter 


Total 


Gross 


private saving 


deficit (—), national 

income and product 

accounts 


Capital 
grants 
received 
by the 
United 
States 
(net) 2 


Total 


Gross 
private 
domes- 
tic in- 


Net 
foreign 
invest- 


Statis- 
tical 
dis- 
crep- 
















ancy 




15.9 


Total 


Per- 
sonal 
saving 


Gross 
busi- 
ness 
saving ' 


Total 


Fed- 
eral 


State 
and 
local 




vest- 
ment 


ment 3 




1929 


14.9 


3.1 


11.7 


1.0 


1.2 


-0.2 




17.0 


16.2 


0.8 


1.1 


1933 


.9 


2.2 


-1.0 


3.2 


-1.4 


-1.3 


-.1 




1.6 


1.4 


.2 


.7 


1939 


8.7 


10.9 


2.1 


8.8 


-2.2 


-2.2 


.0 




10.1 


9.3 


.9 


1.4 


1940 


13.5 


14.2 


3.3 


10.9 


—.7 


-1.3 


.6 




14.6 


13.1 


1.5 


1.1 


1941 


18.5 


22.2 


10.2 


12.0 


-3.8 


-5.1 


1.3 




19.0 


17.9 


1.1 


.5 


1942 


10.5 


41.9 


27.0 


14.8 


-31.4 


-33.1 


1.8 




9.7 


9.9 


-.2 


-.8 


1943 


5.3 


49.4 


32.7 


16.7 


-44.1 


-46.6 


2.5 




3.5 


5.8 


-2.2 


-1.8 


1944 


2.3 


54.1 


36.5 


17.7 


-51.8 


-54.5 


2.7 




5.1 


7.2 


-2.1 


2.7 


1945 


5.1 


44.6 


28.5 


16.0 


-39.5 


-42.1 


2.6 




9.2 


10.6 


-1.4 


4.1 


1946 


34.6 


29.2 


13.4 


15.8 


5.4 


3.5 


1.9 




35.3 


30.7 


4.6 


.7 


1947 


41.2 


26.8 


4.9 


21.8 


14.4 


•13.4 


1.0 




42.9 


34.0 


9.0 


1.8 


1948 


49.0 


40.6 


10.6 


30.0 


8.4 


8.3 


.1 




47.8 


45.9 


2.0 


-1.2 


1949 


34.8 


38.2 


6.7 


31.4 


-3.4 


-2.6 


-.7 




35.9 


35.3 


.6 


1.0 


1950 


49.7 


41.6 


10.8 


30.8 


8.0 


9.2 


-1.2 




51.7 


53.8 


-2.1 


2.0 


1951 


55.5 


49.4 


14.8 


34.6 


6.1 


6.5 


-.4 




59.5 


59.2 


.3 


4.0 


1952 


49.3 


53.1 


16.0 


37.1 


-3.8 


-3.7 


-.0 




51.9 


52.1 


-.2 


2.7 


1953 


48.1 


55.0 


17.0 


38.0 


-6.9 


-7.1 


.1 




51.4 


53.3 


-1.9 


3.3 


1954 


49.4 


56.5 


15.6 


41.0 


-7.1 


-6.0 


-1.1 




52.4 


52.7 


-.3 


3.0 


1955 


65.6 


62.4 


14.9 


47.5 


3.1 


4.4 


-1.3 




68.0 


68.4 


-.3 


2.5 


1956 


73.6 


68.4 


19.7 


48.7 


5.2 


6.1 


-.9 




72.8 


71.0 


1.8 


-.8 


1957 


72.6 


71.7 


20.6 


51.1 


.9 


2.3 


-1.4 




72.8 


69.2 


3.6 


.2 


1958 


60.4 


73.0 


21.7 


51.3 


-12.6 


-10.3 


-2.4 




62.0 


61.9 


.1 


1.7 


1959 


75.8 


77.3 


18.8 


58.5 


-1.6 


-1.1 


-.4 




75.5 


77.6 


-2.0 


-.2 


1960 


78.9 


75.8 


17.1 


58.7 


3.1 


3.0 


.1 




78.2 


76.4 


1.7 


-.7 


1961 


75.8 


80.0 


20.2 


59.8 


-4.3 


-3.9 


-.4 




77.3 


74.3 


3.0 


1.6 


1962 


83.6 


87.4 


20.4 


67.0 


-3.8 


-4.2 


.5 




87.6 


85.2 


2.4 


4.0 


1963 


89.6 


88.9 


18.8 


70.1 


.7 


.3 


.5 




93.4 


90.2 


3.2 


3.7 


1964 


100.1 


102.4 


26.1 


76.2 


-2.3 


-3.3 


1.0 




102.3 


96.6 


5.7 


2.2 


1965 


115.4 


114.9 


30.3 


84.6 


.5 


.5 


-.0 




116.3 


112.0 


4.3 


.9 


1966 


122.9 


124.2 


33.0 


91.2 


-1.3 


-1.8 


.5 




126.1 


124.5 


1.6 


3.2 


1967 


120.3 


134.6 


40.9 


93.7 


-14.2 


-13.2 


-1.1 




122.1 


120.8 


1.2 


1.7 


1968 


130.8 


136.3 


38.1 


98.2 


-5.5 


-5.8 


.3 




130.2 


131.5 


-1.4 


-.6 


1969 


147.5 


136.8 


35.1 


101.7 


10.7 


8.5 


2.1 




144.2 


146.2 


-2.0 


-3.3 


1970 


143.4 


151.9 


50.6 


101.4 


-9.4 


-12.1 


2.8 


0.9 


141.4 


140.8 


.5 


-2.1 


1971.. 


155.4 


173.0 


57.3 


115.7 


-18.3 


-22.0 


3.7 


.7 


156.8 


160.0 


-3.2 


1.3 


1972 


177.5 


180.4 


49.4 


131.0 


-3.5 


-17.3 


13.7 


.7 


179.2 


188.3 


-9.0 


1.7 


1973 


216.8 


210.5 


70.3 


140.2 


6.3 


-6.7 


13.0 


.0 


219.4 


220.0 


-.6 


2.6 


1974. 


204.4 


209.5 


71.7 


137.9 


-3.2 


-10.7 


7.6 


i -2.0 


210.1 


214.6 


-4.5 


5.8 


1975 


195.4 


259.8 


83.>6 


176.2 


-64.4 


-70.6 


6.2 


.0 


202.8 


190.9 


11.9 


7.4 


1976 


237.5 


270.7 


68.0 


202.6 


-33.2 


-53.8 


20.7 


.0 


241.7 


243.0 


-1.2 


4.2 


1977 


272.2 


290.8 


66.9 


223.9 


-18.6 


-48.1 


29.6 


.0 


276.9 


297.8 


-20.9 


4.7 


1978 v 


318.8 


320.4 


76.7 


243.6 


-1.5 


-29.4 


27.8 


.0 


319.7 


344.5 


-24.8 


.9 


1976: 1 


230.1 


275.1 


73.6 


201.5 


-44.9 


-57.7 


12.8 


.0 


233.5 


231.5 


2.0 


3.4 


II 


240.9 


270.8 


69.9 


200.9 


-29.9 


-46.4 


16.4 


.0 


245.0 


243.5 


1.5 


4.1 


III.... 


243.5 


274.1 


68.1 


206.0 


-30.6 


-52.0 


21.4 


.0 


247.5 


249.9 


-2.4 


4.0 


IV.... 


235.6 


262.7 


60.7 


202.0 


-27.1 


-59.1 


32.0 


.0 


241.0 


247.1 


-6.1 


5.3 


1977: 1 


251.8 


259.6 


52.2 


207.4 


-7.8 


-37.3 


29.5 


.0 


255.2 


272.5 


-17.3 


3.4 


II.... 


276.8 


288.6 


67.5 


221.1 


-11.8 


-40.3 


28.5 


.0 


280.4 


295.6 


-15.2 


3.7 


III.... 


285.5 


310.7 


74.3 


236.4 


-25.2 


-56.4 


31.2 


.0 


292.6 


309.7 


-17.1 


7.1 


IV.... 


274.7 


304.3 


73.7 


230.6 


-29.6 


-58.6 


29.0 


.0 


279.5 


313.5 


-34.1 


4.8 


1978: 1 


284.2 


305.4 


82.4 


223.0 


-21.1 


-52.6 


31.5 


.0 


286.4 


322.7 


-36.3 


2.2 


II.... 


326.1 


319.9 


76.3 


243.6 


6.2 


-23.6 


29.8 


.0 


326.6 


345.4 


-18.9 


.5 


III.... 


326.2 


325.7 


76.0 


249.7 


.6 


-22.8 


23.4 


.0 


326.6 


350.1 


-23.5 


.4 


IV p.. 






72.3 










.0 


339.1 


359.9 


-20.7 





















1 Undistributed corporate profits with inventory valuation and capital consumption adjustments, corporate and non- 
corporate capital consumption allowances with capital consumption adjustment, and private wage accruals less disburse- 
ments. 

2 Allocations of special drawing rights (SDR), except as noted in footnote 4. 

3 Net exports of goods and services less net transfers to foreigners and interest paid by government to foreigners plus 
capital grants received by the United States, net. 

< In February 1974, the U.S. Government paid to India $2,010 million in rupees under provisions of the Agricultural 
Trade Development and Assistance Act. This transaction is being treated as capital grants paid to foreigners, i.e., a —$2.0 
billion entry in capital grants received by the United States, net. 

Source: Department of Commerce, Bureau of Economic Analysis. 



210 



Table B-24. — Saving by individuals, 1946-78 • 
(Billions of dollars; quarterly data at seasonally adjusted annual rates] 





Total 


Increase in financial assets 


Net investment in 


Less: Net increase 
in debt 




Total' 


Cur- 
rency 

and 

de- 
mand 

de- 
posits 


Sav- 
ings 
ac- 
counts 


Securities 


Insur- 
ance 
and 
pen- 
sion 
re- 
serves 
( 5 ) 


Non- 
farm 
homes 


Con- 
sumer 

du- 
rables 


Non- 
cor- 
po- 
rate 
busi- 
ness 
assets 


Mort- 
gage 
debt 
on 
non- 
farm 
homes 


Con- 
sumer 
credit 




quarter 


Gov- 
ern- 
ment 
secu- 
rities' 


Corpo- 
rate 
and 
for- 
eign 

bonds 


Corpo- 
rate 
equi- 
ties* 


Other 
debt' 


1946 

1947 

1948 

1949 

1950 

1951 

1952 

1953 

1954 

1955 

1956 

1957 

1958 
1959 

1960 

1961 

1962 

1963 

1964 

1965 
1966 

1967 

1968 
1969 

1970 

1971 

1972 

1973 
1974 

1975 

1976 
1977 

1977: 1.... 
II... 
III.. 
IV... 

1978: 1.... 
II... 
III.. 


22.2 

21.0 
25.3 
21.4 

30.5 
34.1 
29.9 
31.8 
27.8 

33.3 
36.4 
36.1 
33.5 
37.5 

35.6 
34.9 
40.7 
46.4 
55.8 

62.8 
70.3 
75.8 
81.0 
71.1 

84.0 
97.7 
115.2 
134.0 
125.9 

145.7 
154.4 
166.3 

148.8 
146.2 
206.4 
163.7 

161.2 
195.5 
180.8 


18.9 
13.2 
9.1 
10.0 

13.7 
19.2 
23.1 
22.8 
22.1 

28.1 
30.1 
28.6 
31.6 
37.2 

32.6 
35.9 
40.1 
47.7 
56.2 

59.1 
58.4 
70.9 
76.4 
64.2 

79.1 
103.5 
128.3 
146.8 
138.8 

166.4 
199.8 
235.7 

218.7 
213.5 
283.0 
227.6 

236.9 
278.8 
245.8 


5.6 

.1 

-2.9 

-2.0 

2.6 
4.6 
1.6 
1.0 
2.2 

1.2 
1.8 
-.4 
3.8 

.8 

1.0 

-.9 

-1.2 

4.2 

5.2 

7.5 
2.4 
9.9 
11.1 
-2.5 

8.9 
13.1 
14.5 
15.4 

7.9 

5.2 
13.8 
20.4 

24.3 
28.0 
22.3 
6.9 

•22.2 
23.5 
17.9 


6.3 
3.4 
2.2 

2.6 

2.5 
4.8 
7.8 
8.2 
9.2 

8.6 
9.5 
12.0 
13.9 

11.1 

12.1 
18.3 
26.2 
26.3 
26.2 

28.0 
19.1 
35.3 
31.1 
9.1 

43.6 
67.8 
74.6 
64.2 
57.2 

84.8 
108.1 
108.3 

110.4 
99.8 

135.2 
88.0 

90.1 
111.8 
107.4 


-1.5 
1.6 
1.3 
1.8 

-.1 
-.6 
2.5 
2.5 
1.0 

5.8 
3.9 
2.3 
-2.5 
10.1 

2.4 
1.8 
1.3 
1.7 
5.1 

3.9 
11.7 
— . 7 

5.7 
25.3 

-7.2 
-9.9 
1.6 
22.0 
22.6 

20.6 
9.9 
14.3 

7.2 
3.6 
6.7 
39.6 

30.2 
31.3 
25.8 


-0.9 
-.8 
-.1 
-.4 

-.8 

-:\ 

-.1 
-.9 

.7 
1.0 

.9 
1.2 

.4 

.7 
-.1 
-.4 

.1 
-.5 

.5 
1.4 
4.0 
4.2 
5.4 

9.5 
8.3 
4.4 
1.3 
4.7 

8.0 
2.1 
1.1 

.9 

-.0 

3.5 

.2 

-1.0 
-4.1 
-.1 


1.1 
1.1 

1.0 
.7 

.7 
1.8 
1.6 
1.0 

.8 

1.0 
2.0 
1.5 
1.5 

.6 

-.5 

.3 

-2.1 

-2.5 

-.1 

-2.1 
-.7 
-4.2 
-6.5 
-3.7 

-1.6 
-5.1 

-5.7 
-6.9 
-2.2 

-3.6 
-3.4 
-5.1 

-9.6 

-4.3 

-5.7 

-.8 

.1 
-8.8 
-7.5 


5.3 
5.4 
5.3 

5.6 

6.9 
6.3 
7.7 
7.9 
7.8 

8.5 
9.5 
9.5 
10.4 
11.9 

11.5 
12.1 
12.7 
13.9 
16.1 

16.9 
19.2 
19.0 
20.2 
21.3 

24.4 
27.3 
29.3 
33.0 
36.0 

43.4 
52.9 
63.6 

54.6 
49.9 
91.6 
58.4 

59.0 
72.8 
65.9 


3.6 
6.7 
9.1 
8.4 

11.8 
11.7 
11.3 
12.3 
12.7 

16.7 
15.6 
13.2 
12.1 
15.9 

14.3 
12.0 
12.8 
13.4 
13.9 

13.4 
12.6 
10.9 
14.3 
14.2 

11.7 
18.8 
26.0 
28.2 
23.1 

20.9 
33.2 
48.0 

39.8 
45.6 
52.1 
54.5 

57.8 
58.2 
59.9 


3.9 
9.5 
10.4 
10.9 

14.2 

10.4 
7.5 
9.6 

7.0 

11.6 
8.4 
7.8 
3.5 

8.0 

7.4 
4.8 
9.1 
12.2 
15.3 

19.1 
21.2 
18.7 
24.3 
23.8 

17.4 
25.1 
33.6 
39.0 
27.0 

22.5 

40.1 
49.4 

48.9 
48.1 
46.8 
53.8 

47.4 
59.0 
57.7 


2.1 
2.0 
7.1 
2.0 

7.0 
4.4 
2.0 
.8 
1.5 

2.4 

.5 

2.1 

2.3 

3.4 

3.1 
3.3 
6.3 
8.5 
7.7 

11.2 
9.4 
8.5 

9.4 
11.4 

9.8 
13.5 
17.7 
20.3 

2.8 

-.3 

-3.5 

5.6 

1.2 
9.1 
4.3 
7.7 

-3.1 
1.6 

3.9 


3.6 
4.7 
4.6 
4.4 

6.7 
6.6 
6.2 
7.6 
8.7 

12.2 
11.2 
8.9 
9.5 
12.8 

11.7 
12.2 
14.1 
16.2 
17.5 

17.0 

13.8 
12.5 
17.1 
18.5 

14.1 
27.0 
41.6 
47.1 
35.4 

38.1 
61.3 
93.0 

75.9 
92.9 
102.4 
100.8 

92.1 
89.4 
92.9 


2.7 
3.2 
2.9 
2.9 

4.1 
1.2 
4.8 
3.9 
1.1 

6.4 

3.5 

2.6 

.2 

6.4 

4.6 
1.8 
5.8 
7.9 
8.5 

9.6 
6.4 
4.5 

10.0 
10.4 

5.9 
13.1 
17.1 
23.8 
10.2 

9.4 
23.6 
35.0 

33.2 
38.3 
32.6 
36.2 

38.0 
51.6 
43.4 


-0.0 
2.6 
3.0 
2.4 

5.4 
3.8 
3.0 
2.2 
5.8 

6.9 
3.5 
4.0 
6.3 
7.8 

5.5 
7.1 
7.5 
11.2 
11.2 

13.4 
11.1 
16.1 
16.2 
13.6 

13.9 
23.0 
31.7 
29.4 
20.2 

16.3 
30.3 
44.4 

50.7 
38.8 
44.9 
42.9 

47.7 
61.1 
50.3 



> Saving by households, personal trust funds, nonprofit institutions, farms, and other noncorporate business. 

1 Includes commercial paper and miscellaneous financial assets, not shown separately. 

1 Consists of U.S. savings bonds, other U.S. Treasury securities, U.S. Government agency securities and sponsored 
agency securities, and State and local obligations. 

* Includes investment company shares. 

' Private life insurance reserves, private insured and noninsured pension reserves, and government insurance and 
pension reserves. 

1 Security credit, policy loans, noncorporate business mortgage debt, and other debt. 

Source: Board of Governors of the Federal Reserve System. 



211 



Table B-25. — Money income (in 1977 dollars) and poverty status of families and unrelated 

individuals by race of head, 1947—77 





Total 


White 


Black and other races 




Total 
num- 
ber 
(mil- 
lions) 


Median 
income 


Percent with 
incomes 


1 
Total 
num- 
ber 
(mil- 
lions) 


Median 
income 


Percent with 
incomes 


Total 
num- 
ber 
(mil- 
lions) 


Median 
income 


Percent with 
incomes 


Year 


Below 
pov- 
erty 
level 


$25,000 
and 
over 


Below 
pov- 
erty 
level 


$25,000 
and 
over 


Below 
pov- 
erty 
level 


$25,000 
and 
over 


FAMILIES 

1947 

1948 

1949 

1950 

1951 

1952 

1953 


37.2 

38.6 

39.3 

39.9 

40.6 

40.8 

41.2 

42.0 

42.9 

43.5 

43.7 

44.2 

45.1 

'45.5 

'46.4 

'47.1 

'47.5 

'48.0 

'48.5 

'49.2 

'50.1 

'50.8 

'51.6 

'52.2 

53.3 

54.4 

55.1 

55.7 

55.7 

56.2 

56.7 

57.2 

8.2 

8.4 

9.0 

9.4 

9.1 

9.7 

9.5 

9.7 

9.9 

9.8 

10.4 

10.9 

10.9 

ill.l 

111.2 

'11.0 

ill. 2 

' 12. 1 

'12.2 

'12.5 

'13.2 

'13.9 

'14.6 

'15.5 

16.3 

16.8 

18.3 

18.9 

18.9 

20.2 

21.5 

23.1 


$8,223 
8,024 
7,899 
8,356 
8,652 
8,881 
9,611 
9,396 
9,999 
10, 658 
10, 692 
10, 661 
11,262 
11,500 
11,617 
11,931 

12, 368 
12,834 

13, 362 

14, 064 

14, 398 
15,036 

15, 593 
15, 399 

15, 389 
16, 102 

16, 433 
15,773 
15, 855 
15,447 
15,923 
16,009 

$2,659 
2,509 
2,669 
2,630 
2,787 
3,218 
3,162 
2,756 
2,981 
3,179 
3,215 
3,115 
3,238 
3,519 
3,552 
3,511 
3,563 
3,874 
4,135 
4,276 
4,318 
4,853 
4,845 
4,896 
4,962 
5,100 
5,637 
5,455 
5,656 
5,497 
5,722 
5,907 






34.1 
35.3 


$8, 566 
8,332 
8,215 
8,672 
9,003 
9,393 
9,965 
9,781 
10, 439 
11,153 
11,127 
11,108 
11,732 
11,940 
12,115 
12,495 
12,961 
13, 398 
13,927 
14,611 
14,945 
15, 567 
16, 190 
15,974 

15, 968 

16, 729 
17,175 
16,412 
16, 476 
16, 065 
16, 539 
16, 740 

$2, 809 
2,651 
2,881 
2,806 
2,934 
3,467 
3,338 
2,966 
3,169 
3,263 
3,440 
3,337 
3,459 
3,805 
3,819 
3,758 
3,735 
4,080 
4,312 
4,496 
4,483 
5,142 
5,088 
5,124 
5,185 
5,326 
5,823 
5,697 
5,860 
5,741 
5,968 
6,131 






3.1 
3.3 


$4,378 
4,451 
4,195 
4,704 
4,741 
5,338 
5,587 
5,448 
5,757 
5,868 
5,949 
5,690 
6,060 
6,610 
6,463 
6,666 
6,857 
7,498 
7,670 
8,759 
9,246 
9,737 
10, 234 
10, 169 
10, 046 
10, 293 
10, 358 
10, 156 
10, 541 
10, 495 
10, 455 
10, 142 

$2, 024 
1,986 
2,083 
2,056 
2,168 
2,398 
2,624 
1,969 
2,116 
2,423 
2,186 
2,263 
2,234 
2,185 
2,345 
2,509 
2,564 
2,796 
3,144 
2,827 
3,312 
3,482 
3,587 
3,501 
3,479 
3,956 
4,351 
3,870 
4,097 
3,819 
3,919 
4,642 






























































18.5 
18.1 
18.1 
17.2 
15.9 
15.0 
13.9 
11.8 
11.4 
10.0 
9.7 
10.1 
10.0 
9.3 
8.8 
9.2 
8.8 
9.7 
9.4 
9.3 


3.2 
3.8 
4.0 
4.3 
5.4 
4.8 
5.4 
6.6 
7.4 
8.4 
8.8 
9.8 
10.7 
11.8 
13.4 
14.6 
16.7 
18.8 
18.2 
18.0 
20.5 
20.9 
18.9 
21.4 
19.4 
20.8 
22.4 


38.2 
39.0 
39.5 
39.7 
40.2 
40.9 
41.1 
41.9 
42.4 
42.7 
43.1 
43.5 
44.1 
44.8 
45.4 
46.0 
46.5 
47.6 
48.5 
48.9 
49.5 
49.4 
49.9 
50.1 
50.5 

7.2 
7.3 


15.2 
14.9 
14.8 
13.9 
12.8 
12.2 
11.1 
9.3 
9.0 
8.0 
7.7 
8.0 
7.9 
7.1 
6.6 
7.0 
6.8 
7.7 
7.1 
7.0 


3.6 

4.1 

4.3 

4.7 

5.8 

5.3 

5.8 

7.2 

8.0 

9.2 

9.5 

10.6 

11.5 

12.8 

14.5 

15.6 

17.7 

20.0 

19.3 

19.1 

21.9 

22.4 

20.2 

22.7 

20.7 

22.2 

23.9 


3.8 
3.9 
4.0 
4.0 
4.0 
4.2 
4.3 
4.5 
4.6 
4.8 
4.8 
4.8 
5.0 
5.0 
5.1 
5.2 
5.4 
5.7 
5.9 
6.1 
6.3 
6.3 
6.4 
6.6 
6.7 

1.0 
1.0 


50.4 
49.0 
49.0 
48.0 
43.7 
40.0 
39.7 
33.9 
32.1 
28.2 
26.9 
28.1 
27.4 
27.7 
26.2 
26.0 
25.1 
25.3 
26.4 
26.5 


0.5 
.4 


1954 

1955 


.5 
.3 


1956 


.6 


1957 


.3 


1958 

1959 

1960 


1.0 
1.0 

1.7 


1961 


2.4 


1962 

1963 . 


1.9 
2.7 


1964 


3.3 


1965 . 


3.0 


1966 . 


3.9 


1967 


5.7 


1968 

1969 


7.3 
8.0 


1970 


8.4 


1971 


8.1 


1972 


9.3 • 


1973 

1974 

19742 


9.4 
8.5 
10.7 


1975 


9.4 


1976 


10.0 


1977 


10.8 


UNRELATED 
INDIVIDUALS 


Below 
pov- 
erty 
level 


$15,000 
and 
over 


Below 
pov- 
erty 
level 


$15,000 
and 
over 


Below 
pov- 
erty 
level 


$15,000 
and 
over 


1947 














1948 














1949 














1950 


















1951 

1952. 

1953 

1954 

1955..., 

1956 


46.1 
45.2 
45.9 
45.4 
44.2 
42.7 
39.8 
38.3 
38.1 
34.0 
34.0 
32.9 
31.6 
29.0 
25.6 
25.5 
24.1 
25.1 
24.9 
22.6 


1.2 

1.9 
2.1 
1.8 
2.2 
2.3 
3.2 
3.7 
3.7 
3.7 
4.8 
5.8 
6.2 
6.6 
7.4 
7.4 
8.2 
10.1 
9.9 
10.3 
10.6 
11.2 
12.6 
11.0 
11.5 
11.0 
11.8 
12.6 


8.3 
8.5 
8.5 
8.9 
9.2 
9.3 
9.6 
9.6 
9.5 
9.7 
10.4 
10.5 
10.7 
11.3 
12.0 
12.5 
13.4 
14.2 
14.5 
15.8 
16.3 
16.3 
17.5 
18.6 
19.9 


44.1 
43.0 
43.2 
42.7 
42.0 
40.7 
38.1 
36.1 
36.5 
32.2 
32.1 
30.8 
29.6 
27.1 
23.7 
23.2 
21.8 
22.7 
22.7 
20.4 


1.2 
2.2 
2.4 
2.0 
2.5 
2.5 
3.7 
4.2 
4.2 
4.1 
5.4 
6.5 
6.9 
7.4 
8.3 
8.2 
8.9 
11.0 
10.9 
11.2 
11.4 
12.0 
13.3 
11.8 
12.2 
11.7 
12.5 
13.3 


1.4 
1.4 
1.3 
1.5 
1.6 
1.6 
1.5 
1.6 
1.5 
1.5 
1.6 
1.7 
1.6 
1.8 
1.8 
2.0 
1.9 
2.1 
2.3 
2.5 
2.6 
2.6 
2.7 
2.9 
3.2 


57.4 
59.3 
62.7 
62.1 
58.3 
55.0 
50.7 
53.1 
48.2 
45.7 
45.5 
46.7 
44.9 
40.9 
37.8 
40.0 
38.0 
40.9 
39.5 
35.9 


0.6 
.4 
.3 
.5 
.2 
.7 


1957 


.3 


1958.... 

1959 

1960 

1961 


.6 
1.0 
1.1 
1.4 


1962. 


2.0 


1963 


1.2 


1964 


2.2 


1965 


1.8 


1966... 


2.1 


1967 


3.3 


1968.. 


4.1 


1969 


3.6 


1970.... 


3.4 


1971 


4.7 


1972 


6.1 


1973 


7.9 


1974 


6.1 


1974 » 


6.9 


1975 


6.4 


1976 


7.0 


1977 


8.1 




' 







' Revised using population controls based on the 1970 census. Such controls are not available by race. 

■ Based on revised methodology procedures. 

Note.— The poverty level is based on the poverty index adopted by a Federal interagency committee in 1969. That index 
reflects different consumption requirements for families based on size and composition, sex and age of family head, and 
farm-nonfarm residence. The poverty thresholds are updated every year to reflect changes in the consumer price index. 
For further details, see "Current Population Reports," Series P-60, No. 116, Bureau of the Census. 

Source: Department of Commerce, Bureau of the Census. 

212 



POPULATION, EMPLOYMENT, WAGES, AND 
PRODUCTIVITY 

Table E-26. — Population by age groups, 1929-78 
[Thousands of personsi 



July 1 



1929 

1933 

1939 

1940 
1941 
1942 
1943 
1944 

1945 
1946 
1947 
1948 
1949 

1950 
1951 
1952 
1953 
1954 

1955 
1956 
1957 
1958 
1959 

1960 
1961 
1962 
1963 
1964 

1965. 
1966 

1967. 
1968. 
1969 

1970. 
1971. 
1972. 
1973. 
1974. 

1975 
1976 
1977. 
1978. 



121.767 

125,579 

130, 880 

132,122 
133.402 
134.860 
136,739 
138, 397 

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

152.271 
154.878 
157,553 
160. 184 
163. 026 

165,931 
168. 903 
171,984 
174,882 
177, 830 

180,671 
183,691 
186,538 
189,242 
191,889 

194,303 
196. 560 
198,712 
200. 706 
202,677 

204, 878 

207, 053 

208, 846 
210,410 
211,901 

213, 559 
215,152 
216,863 
218,548 



Age (years) 



Under 5 



11,734 
10,612 

10,418 

10,579 
10,850 
11,301 
12,016 
12,524 

12,979 
13. 244 
14,406 
14,919 

15. 607 

16,410 
17,333 
17,312 
17.638 

18, 057 

18.566 

19. 003 

19. 494 
19.887 
20.175 

20.341 

20. 522 
20, 469 
20, 342 
20, 165 

19,824 
19. 208 
18.563 
17.913 
17,376 

17,148 
17,177 
16,990 
16,694 

16, 288 

15,879 
15, 345 
15,241 
15,361 



5-15 


16-19 


20-24 


25-44 


26, 800 


9,127 


10, 694 


35, 862 


26, 897 


9,302 


11,152 


37,319 


25, 179 


9,822 


11,519 


39. 354 


24,811 
24, 516 
24, 231 
24, 093 
23,919 


9,895 
9.840 
9.730 
9,607 
9,551 


11,690 
11,807 
11,955 
12.064 
12,062 


39, 868 

40. 383 
40.861 
41,420 
42,016 


23. 907 

24. 103 

24. 468 

25, 209 
25,852 


9.361 
9.119 
9.097 
8.952 
8,788 


12,036 
12,004 
11,814 

11,794 
11,700 


42,521 

43.027 

43, 657 

44, 288 
44,916 


26, 721 

27, 279 

28, 894 
30. 227 
31,480 


8.542 
8.446 
8.414 
8.460 
8.637 


11,680 
11.552 
11.350 
11.062 
10.832 


45.672 
46. 103 
46, 495 
46. 786 
47.001 


32.682 
33, 994 

35, 272 

36, 445 

37, 368 


8.744 
8.916 
9.195 
9.543 
10,215 


10,714 
10.616 
10.603 
10.756 
10, 969 


47, 194 
47. 379 
47. 440 
47,337 
47, 192 


38, 494 

39, 765 
41,205 
41,626 

42.297 


10.683 
11,025 
11,180 
12,007 
12,736 


11,134 

11.483 
11.959 
12,714 
13.269 


47,140 1 
47, 084 
47.013 
46. 994 
46. 958 


42,938 
43,702 

44.244 
44,622 
44,840 


13,516 
14.311 
14.200 
11.452 
14,800 


13, 746 
14,050 
15,248 
15,786 
16,480 


46,912 
47.001 
47.194 
47.721 
48,064 


44, 774 

44,441 
43,948 
43,227 
42, 538 


15,275 
15,635 
15,946 
16,310 
16, 590 


17,184 
18,089 
18,032 
18,345 
18,741 


48, 435 
48.811 
50,254 j 
51,411 
52,593 


41,956 
41,459 
40, 574 
39, 598 


16, 793 
16, 928 
16, 966 
16,921 


19, 229 

19, 629 

20, 076 
20,441 


53,735 
55,130 
56,705 
58,320 

1 



45-64 



21,076 
22, 933 

25, 823 

26, 249 
26.718 
27, 196 
27,671 
28, 138 

28. 630 

29, 064 

29. 498 
29.931 
30,405 

30. 849 
31,362 
31,884 

32, 394 
32,942 

33, 506 

34, 057 
34.591 

35, 109 

35, 663 

36. 203 
36. 722 
37.255 
37,782 

38, 338 

38.916 

39, 534 

40, 193 
40,846 
41,437 

41,975 
42,413 
42,785 
43,077 
43,319 

43, 546 
43, 707 
43, 793 
43,852 



65 and 
over 



6,474 

7,363 

8,764 

9,031 
9.288 
9,584 
9.867 
10,147 

10. 494 
10.828 
11.185 
11,538 
11,921 

12.397 
12.803 

13. 203 
13,617 

14. 076 

14,525 
14,938 
15,388 
15.806 
16. 248 

16.675 
17.089 
17,457 
17,778 

18, 127 

18.451 
18.755 
19.071 

19, 365 
19.680 

20, 087 
20, 488 
20,892 
21,346 
21.833 

22, 420 

22, 954 

23, 507 

24, 054 



Note.— Includes Armed Forces overseas beginning 1940. Includes Alaska and Hawaii beginning 1950. 
Source: Department of Commerce. Bureau of the Census. 



213 



Table B-27. — Noninstitutional population and the labor force, 1929-78 
[Monthly data seasonally adjusted, except as noted] 



Year or 
month 



1975..... 

1976 

1977 

1978 3... 



Nonin- 
stitu- 
tional 
popu- 
lation! 



Armed 
Forces i 



Civilian labor force 



Total 



Employment 



Total 



Agri- 
cul- 
tural 



Non- 
agri- 
cul- 
tural 



Thousands of persons 14 years of age and over 



100,380 
101,520 
102,610 
103,660 
104,630 

105,530 
106,520 
107,608 



Thousands of persons 16 years of age and over 



Unem- 
ploy- 
ment 



260 


49, 180 


47, 630 


10,450 


37, 180 


250 


51, 590 


38, 760 


10, 090 


28, 670 


370 


55, 230 


45, 750 


9,610 


36, 140 


540 

1,620 

3,970 

9,020 

11,410 


55, 640 
55,910 
56,410 
55, 540 
54, 630 


47,520 
50, 350 
53, 750 
54,470 
53, 960 


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


37, 980 
41,250 
44, 500 
45, 390 
45,010 


11,440 
3,450 
1,590 


53,860 
57,520 
60. 168 


52,820 
55, 250 
57,812 


8,580 
8,320 
8,256 


44, 240 
46,930 
49, 557 



103,418 
104,527 
105,611 


1,591 
1,459 
1,617 


59, 350 
60,621 
61,286 


57,038 
58, 343 
57,651 


7,890 
7,629 
7,658 


49, 148 
50,714 
49,993 


106,645 
107,721 
108,823 
110,601 
111,671 


1,650 
3,100 
3,592 
3,545 
3,350 


62, 208 
62,017 
62,138 
63,015 
63,643 


58,918 
59, 961 
60, 250 
61,179 
60, 109 


7,160 
6,726 
6,500 
6,260 
6,205 


51,758 
53, 235 
53, 749 
54,919 
53, 904 


112,732 
113,811 
115,065 
116,363 
117,881 


3,049 
2,857 
2,800 
2,636 
2,552 


65,023 
66,552 
66,929 
67,639 
68, 369 


62. 170 
63, 799 
64,071 
63,036 
64, 630 


6,450 
6,283 
5,947 
5,586 
5,565 


55,722 
57,514 
58,123 
57,450 
59, 065 


119,759 
121,343 
122,981 
125,154 
127,224 


2,514 
2,572 
2,828 
2,738 
2,739 


69, 628 
70,459 
70,614 
71,833 
73,091 


65,778 
65, 746 
66,702 
67,762 
69, 305 


5,458 
5,200 
4,944 
4,687 
4,523 


60,318 
60,546 
61,759 
63,076 
64, 782 


129,236 
131,180 
133,319 
135,562 
137,841 


2,723 
3,123 
3,446 
3,535 
3,506 


74,455 
75,770 
77,347 
78, 737 
80, 734 


71,088 
72,895 
74,372 
75,920 
77,902 


4,361 
3,979 
3,844 
3,817 
3,606 


66, 726 
68,915 
70,527 
72, 103 
74, 296 


140,182 
142,596 
145,775 
148,263 
150,827 


3,188 
2,817 
2,449 
2,326 
2,229 


82,715 
84,113 
86, 542 
88,714 
91,011 


78,627 
79, 120 
81,702 
84,409 
85, 935 


3,462 
3,387 
3,472 
3,452 
3,492 


75, 165 
75,732 
78, 230 
80,957 
82, 443 


153,449 
156,048 
158, 559 
161,058 


2,180 
2,144 
2,133 
2,117 


92,613 
94, 773 
97, 401 
100, 420 


84,783 
87,485 
90,546 
94, 373 


3,380 
3,297 
3,244 
3,342 


81,403 
84, 188 
87, 302 
91,031 



1,550 

12, 830 

9,480 

8,120 
5,560 
2,660 
1,070 
670 

1,040 
2,270 
2,356 



2,311 
2,276 
3,637 

3,288 
2,055 
1,883 
1,834 
3,532 

2,852 
2,750 
2,859 
4,602 
3,740 

3,852 
4,714 
3,911 
4,070 
3,786 

3,366 
2,875 
2,975 
2,817 
2,832 

4,088 
4,993 
4,840 
4,304 
5,076 

7,830 
7,288 
6,855 
6,047 



Unem- 
ploy- 
ment 
rate 
(percent 

of 
civilian 
labor 
force) 



3.2 

24.9 

17.2 

14.6 
9.9 
4.7 
1.9 
1.2 

1.9 
3.9 
3.9 



3.9 
3.8 
5.9 

5.3 
3.3 
3.0 
2.9 
5.5 

4.4 
4.1 
4.3 
6.8 
5.5 

5.5 
6.7 
5.5 
5.7 
5.2 

4.5 
3.8 
3.8 
3.6 
3.5 

4.9 
5.9 
5.6 
4.9 
5.6 

8.5 
7.7 
7.0 
6.0 



Civilian labor force 
participation rate » 



Total 



Males 



Percent 



55.7 
56.0 
57.2 
58.7 
58.6 

57.2 
55.8 
56.8 



58.3 
58.8 
58.9 

59.2 
59.3 
59.0 
58.9 
58.8 

59.3 
60.0 
59.6 
59.5 
59.3 

59.4 
59.3 
58.8 
58.7 
58.7 

58.9 
59.2 
59.6 
59.6 
60.1 

60.4 
60.2 
60.4 
60.8 
61.2 

61.2 
61.6 
62.3 
63.2 



83.7 
84.3 
85.6 
86.4 
87.0 

84.8 
82.6 
84.0 



86.4 
86.6 
86.4 

86.4 
86.5 
86.3 
86.0 
85.5 

85.3 
85.5 
84.8 
84.2 
83.7 

83.3 
82.9 
82.0 
81.4 
81.0 

80.7 
80.4 
80.4 
80.1 
79.8 

79.7 
79.1 
79.0 
78.8 
78.7 

77.9 
77.5 
77.7 
77.9 



See next page for continuation of table. 



214 



Table E-27. — Noninstitutional population and the labor force, 1929-78 — Continued 
[Monthly data seasonally adjusted, except as noted] 



Year or month 



1976: Jan.. 
Feb.. 
Mar.. 
Apr.. 
May. 
June. 

July.. 

Aug.. 
Sept. 
Oct.. 
Nov.. 
Dec. 



1977: Jan.. 
Feb.. 

Mar.. 
Apr.. 
May. 
June. 

July. 

Aug. 
Sept. 
Oct.. 
Nov. 
Dec.. 



1978: Jan 3. 
Feb.. 
Mar. 
Apr.. 
May. 
June. 

July. 
Aug. 
Sept. 
Oct.. 
Nov_. 
Dec. 



Nonin- 
stitu- 
tional 
popu- 
lation! 



Armed 
Forces • 



Total 



Civilian labor force 
Employment 



Total 



Agri- 
cul- 
tural 



No.n- 
agri- 
cul- 
tural 



Thousands of persons 16 years of age and over 



Unem- 
ploy- 
ment 



154,915 


2,140 


93,614 


86, 224 


3,342 


82, 882 


155, 106 


2,146 


93, 683 


86, 488 


3,275 


83,213 


155,325 


2,147 


93, 909 


86, 805 


3,271 


83, 534 


155,516 


2,144 


94, 356 


87, 138 


3,398 


83, 740 


155,711 


2,142 


94, 475 


87, 438 


3,302 


84, 136 


155,925 


2,137 


94, 527 


87,321 


3,272 


84, 049 


156, 142 


2,140 


95, 188 


87,818 


3,320 


84, 498 


156,367 


2,147 


95, 285 


87, 900 


3,349 


84, 551 


156, 595 


2,145 


95, 143 


87, 863 


3,257 


84, 606 


156, 788 


2,147 


95, 163 


87, 840 


3,286 


84, 554 


157,006 


2,149 


95,745 


88, 278 


3,243 


85, 035 


157,176 


2,146 


95,840 


88, 454 


3,231 


85, 223 


157, 381 


2,133 


95, 774 


88, 659 


3,130 


85, 529 


157, 584 


2,137 


96, 316 


89, 048 


3,188 


85, 860 


157, 782 


2,138 


96, 654 


89, 503 


3,191 


86,312 


157,986 


2,132 


96, 749 


89, 805 


3,261 


86, 544 


158,228 


2,128 


97, 062 


90, 166 


3,349 


86,817 


158,456 


2,129 


97, 508 


90, 500 


3,291 


87, 209 


158, 682 


2,135 


97,311 


90, 605 


3,198 


87, 407 


158,899 


2,137 


97, 698 


90, 903 


3,219 


87, 684 


159,114 


2,131 


97,811 


91,187 


3,188 


87, 999 


159, 334 


2,134 


98, 028 


91,374 


3,238 


88, 136 


159, 522 


2,132 


98, 838 


92, 203 


3,364 


88, 839 


159, 736 


2,129 


98, 748 


92, 561 


3,304 


89, 257 


159,937 


2,121 


99,215 


92, 923 


3,363 


89, 560 


160, 128 


2,124 


99, 139 


93, 047 


3,280 


89, 767 


160, 313 


2,122 


99, 435 


93, 282 


3,334 


89, 948 


160, 504 


2,118 


99, 767 


93, 704 


3,274 


90, 430 


160,713 


2,113 


100, 109 


93, 953 


3,243 


90,710 


160, 928 


2,098 


100, 504 


94, 640 


3,424 


91,216 


161,148 


2,116 


100,622 


94, 446 


3,377 


91, 069 


161,348 


2,122 


100, 663 


94,723 


3,351 


91,372 


161,570 


2,123 


100, 974 


95,010 


3,406 


91,604 


161,829 


2,122 


101,077 


95,241 


3.374 


91,867 


162, 033 


2,117 


101,628 


95, 751 


3,275 


92,476 


162,250 


2,108 


101,867 


95, 855 


3,387 


92, 468 



7,390 
7,195 
7,104 
7,218 
7,037 
7,206 

7,370 
7,385 
7,280 
7,323 
7,467 
7,386 

7,115 

7,268 
7,151 
6,944 
6,896 
7,008 

6,706 
6,795 
6,624 
6,654 
6,635 
6,187 

6,292 
6,092 
6,153 
6,063 
6,156 
5,864 

6,176 
5,940 
5,964 
5,836 
5,877 
6,012 



Unem- 
ploy- 
ment 
rate 
(percent 

of 
civilian 
labor 
force) 



Civilian labor force 
participation rate' 



Total 



Males 



Females 



Percent 



7.9 


61.3 


77.4 


7.7 


61.2 


77.3 


7.6 


61.3 


77.3 


7.6 


61.5 


77.7 


7.4 


61.5 


77.6 


7.6 


61.5 


77.3 


7.7 


61.8 


77.6 


7.8 


61.8 


77.6 


7.7 


61.6 


77.5 


7.7 


61.5 


77.5 


7.8 


61.8 


77.6 


7.7 


61.8 


77.5 


7.4 


61.7 


77.4 


7.5 


62.0 


77.6 


7.4 


62.1 


77.6 


7.2 


62.1 


77.5 


7.1 


62.2 


77.6 


7.2 


62.4 


77.8 


6.9 


62.2 


77.6 


7.0 


62.3 


77.6 


6.8 


62.3 


77.3 


6.8 


62.4 


77.8 


6.7 


62.8 


78.0 


6.3 


62.7 


77.9 


6.3 


62.9 


78.0 


6.1 


62.7 


77.8 


6.2 


62.9 


77.9 


6.1 


63.0 


77.8 


6.1 


63.1 


77.9 


5.8 


63.3 


78.0 


6.1 


63.3 


77.8 


5.9 


63.2 


77.7 


5.9 


63.3 


77.7 


5.8 


63.3 


77.7 


5.8 


63.6 


78.0 


5.9 


63.6 


78.0 



46.8 
46.9 
47.0 
47.1 
47.1 
47.3 

47.6 
47.7 
47.3 
47.3 
47.7 
47.7 

47.6 
47.9 
48.2 
48.3 
48.4 
48.5 

48.3 
48.6 
48.8 
48.5 
49.2 
49.0 

49.2 
49.2 
49.4 
49.7 
49.9 
50.1 

50.3 
50.2 
50.5 
50.3 
50.6 
50.7 



1 Not seasonally adjusted. 

1 Civilian labor force as percent of civilian noninstitutional population. 

3 Not strictly comparable with earlier data due to population adjustments as follows: Beginning 1953, introduction of 
1950 census data added about 600,000 to population and about 350,000 to labor force, total employment, and agricultural 
employment. Beginning 1960, inclusion of Alaska and Hawaii added about 500,000 to population, about 300,000 to labor 
force, and about 240,000 to nonagnctltural employment. Beginning 1962, introduction of 1960 census data reduced popu- 
lation by about 50,000 and labor force and employment by about 200,000. Beginning 1972, introduction of 1970 census 
data added about 800,000 to civilian noninstitutional population and about 333,000 to labor force and employment. A 
subsequent adjustment based on 1970 census in March 1973 added 60,000 to labor force and to employment. Beginning 
1978, changes in sampling and estimation procedures introduced into the household survey added about 250,000 to labor 
force and to employment. Unemployment levels and rates were not significantly affected. 

Note.— Labor force data in Tables B-27 through B-32 are based on household interviews and relate to the calendar 
week including the 12th of the month. For definitions of terms, area samples used, historic comparability of the data, 
comparability with other series, etc., see "Employment and Earnings.' 

Source: Department of Labor, Bureau of Labor Statistics. 



215 



Table B-28. — Civilian employment and unemployment by sex and age, 1947-78 
[Thousands of persons 16 years of age and over; monthly data seasonally adjusted] 





Employment 


Unemployment 






Males 




Females 






Males 




Females 


Year or 






















month 




























Total 






20 






20 


Total 






20 






20 






Total 


16-19 


years 


Total 


16-19 


years 




Total 


16-19 


years 


Total 


16-19 


years 








years 


and 




years 


and 






years 


and 




years 


and 




57, 038 






over 




1,691 


over 








over 






over 


1947... 


40,995 


2,218 


38,776 


16,045 


14,354 


2,311 


1,692 


270 


1,422 


619 


144 


475 


1948... 


58, 343 


41,725 


2,345 


39, 382 


16,617 


1,683 


14,937 


2,276 1,559 


255 


1,305 


717 


152 


564 


1949... 


57,651 


40,925 


2,124 


38, 803 


16,723 


1,588 


15,137 


3,637,2,572 


352 


2,219 


1,065 


223 


841 


1950... 


58,918 


41,578 


2,186 


39, 394 


17,340 


1,517 


15, 824 


3, 288 2, 239 


318 


1,922 


1,049 


195 


854 


1951... 


59,961 


41,780 


2,156 


39,626 


18,181 


1,611 


16,570 


2,055 1,221 


191 


1,029 


834 


145 


689 


1952... 


60, 250 


41,682 


2,106 


39,578 


18,568 


1,612 


16,958 


1,883 1,185 


205 


980 


698 


140 


559 


1953'.. 


61,179 


42,430 


2,135 


40,296 18, 749 


1,584 


17,164 


1,834 1,202 


184 


1,019 


632 


123 


510 


1954... 


60, 109 


41,619 


1,985 


39,634 18, 490 


1,490 


17,000 


3,532 2,344 


310 


2,035 


1,188 


191 


997 


1955... 


62,170 


42,621 


2,095 


40,526 19,551 


1,548 


18,002 


2,852 1,854 


274 


1,580 


998 


176 


823 


956... 


63,799 


43,379 


2,164 


41,216 20,419 


1,654 


18.767 


2,750 1,711 


269 


1,442 


1,039 


209 


832 


957... 


64,071 


43,357 


2,117 


41,239 20,714 


1,663 


19,052 


2,859 1,841 


299 


1.541 


1,018 


197 


821 


958... 


63, 036 


42,423 


2,012 


40,411 


20,613 


1,570 


19,043 


4,602 3,098 


416 2,681 


1,504 


262 


1,242 


959... 


64,630 


43,466 


2,198 


41,267' 


21,164 


1,640 


19,524 


3,740 2,420 


398 


2,022 


1,320 


256 


1,063 


960 ».. 


65,778 


43,904 


2,360 


41,543 


21,874 


1,769 


20, 105 


3, 852 2, 486 


425 


2,060 


1,366 


286 


1.080 


961... 


65, 746 


43,656 


2,314 


41,342 


22, 090 


1,793 


20,296 


4,714 2,997 


479 


2,518 


1,717 


349 


1,368 


962'.. 


66, 702 


44, 177 


2.362 


41,815 


22,525 


1,833 


20,693 


3,911 2,423 


407 


2,016 


1,488 


313 


1,175 


963... 


67.762 


44,657 


2,406 


42,251 


23,105 


1,849 


21,257 


4,070 2,472 


500 


1,971 


1,598 


383 


1,216 


964... 


69, 305 


45,474 


2,587 


42. 886 


23,831 


1,929 


21,903 


3,786 2,205 

1 


487 


1,718 


1,581 


386 


1,195 


965... 


71,088 


46,340 


2,918 


43,422 


24,748 


2,118 


22, 630 


3,366 1,914 


479 


1,435 


1,452 


395 


1,056 


966... 


72,895 


46,919 


3,252 


43,668 


25,976 


2,469 


23,510 


2,875 1,551 


432 


1,120 


1,324 


404 


921 


967... 


74,372 


47,479 


3,186 


44,293 26,893 


2,497 


24,397 


2,975 1,508 


448 


1,060 


1,468 


391 


1,078 


968... 


75,920 


48,114 


3,255 


44, 859 


27,807 


2,525 


25,281 


2,817 1,419 


427 


993 


1,397 


412 


985 


969... 


77,902 


48,818 


3,430 


45,388 


29,084 


2,686 


26,397 


2,832 1,403 


441 


963 


1,429 


412 


1,016 


970... 


78,627 


48, 960 


3,407 


45, 553 


29,667 


2,734 


26,933 


4, 088 2, 235 


599 


1,636 


1,853 


506 


1,347 


971... 


79,120 


49, 245 


3,470 


45,775 


29,875 


2,725 


27, 149 


4.993 2,776 


691 


2,086 


2,217 


567 


1,650 


972'.. 


81.702 


50.630 


3.750 


46.880 


31.072 


2,972 


28. 100 


4.840 2.635 


707 


1,928 


2,205 


535 


1,610 


973'.. 


84, 409 


51,963 


4,017 


47,946 32,446 


3,219 


29,228 


4, 304 2, 240 


647 


1,594 


2,064 


579 


1,485 


974... 


85,935 


52,518 


4,074 


48,445 


33,417 


3,329 


30, 088 


5, 076 2, 668 


749 


1,918 


2,408 


660 


1,748 


975... 


84,783 


51,230 


3,803 


47,427 


33,553 


3,243 


30,310 


7,830,4,385 


957 


3,428 


3,445 


795 


2,649 


976... 


87, 485 


52, 391 


3,904 


48, 486 


35, 095 


3,365 


31,730 


7, 288 3, 968 


928 


3,041 


3,320 


773 


2,546 


977... 


90, 546 


53, 861 


4,124 


49, 737 


36,685 


3,486 


33, 199 


6,855 3,588 


861 


2,727 


3,267 


781 


2,486 


978'.. 


94, 373 


55, 491 


4,279 


51,212 


38, 882 


3,702 


35, 180 


6, 047i3, 051 


799 


2,252 


2,996 


760 


2,236 


977: 
Jan.. 


88, 659 


52,959 


3,941 


49,018 


35, 700 


3,332 


32, 368 


7, 115'3, 849 


866 


2,983 


3,266 


813 


2,453 


Feb.. 


89, 048 


53,117 


3,977 


49, 140 


35,931 


3,444 


32, 487 


7, 268 3, 948 


889 


3,059 


3,320 


781 


2,539 


Mar.. 


89, 503 


53, 333 


4,022 


49,311 


36, 170 


3,463 


32, 707 


7, 151 3, 772 


895 


2,877 


3,379 


797 


2,582 


Apr.. 


89, 805 


53,470 


4,082 


49, 388 


36, 335 


3,442 


32, 893 


6, 944 3, 627 


851 


2,776 


3,317 


802 


2,515 


May.. 


90, 166 


53, 597 


4,133 


49, 464 


36, 569 


3,340 


33, 229 


6, 896 3, 673 


871 


2,802 


3,223 


782 


2,441 


June. 


90,500 


53,910 


4,147 


49, 763 


36, 590 


3,533 


33, 057 


7, 008 3, 629 


943 


2,686 


3,379 


838 


2,541 


July.. 


90, 605 


53, 908 


4,170 


49, 738 


36, 697 


3,507 


33, 190 


6, 706 3, 506 


846 


2,660 


3,200 


757 


2,443 


Aug.. 


90, 903 


53, 980 


4,131 


49, 849 


36, 923 


3,661 


33, 262 


6, 795 3, 542 


875 


2,667 


3,253 


764 


2,489 


Sept. 


91, 187 


54, 046 


4,104 


49,942 


37, 141 


3,474 


33, 667 


6, 624 3, 352 


£64 


2,488 


3,272 


796 


2,476 


Oct.. 


91,374 


54, 369 


4,222 


50, 147 


37, 005 


3,514 


33, 491 


6, 654 3, 433 


828 


2,605 


3,221 


781 


2,440 


Nov _ 


92, 203 


54, 706 


4,276 


50,430 


37, 497 


3,550 


33, 947 


6,635 3,331 


842 


2,489 : 


3,304 


780 


2,524 


Dec. 


92, 561 


54, 922 


4,308 


50,614 


37, 639 


3,573 


34, 066 


6,187,3,146 


759 


2,387 


3,041 


679 


2,362 


978: 
Jan.. 


92,923 


54, 992 


4,287 


50, 705 


37,931 


3,573 


34, 358 


6, 292 3, 256 


792 


2,464 


3,036 


748 


2,288 


Feb.. 


93, 047 


54, 943 


4,158 


50, 785 


38, 104 


3,564 


34,540 


6,092 3,221 


845 ' 


2,376 


2,871 


759 


2,112 


Mar.. 


93, 282 


55, 042 


4,201 


50, 841 


38, 240 


3,562 


34, 678 


6, 153 3,235 


841 | 


2,394 2,918 


749 


2,169 


Apr.. 


93, 704 


55, 184 


4,187 


50, 997 


38, 520 


3,646 


34, 874 


6, 063 3, 096 


817 


2,279 2,967 


756 


2,211 


May.. 


93, 953 


55, 372 


4,253 


51,119 


38,581 


3,695 


34, 886 


6, 156 3, 032 


768 


2, 264 3, 124 


802 


2,322 


June. 


94, 640 


55, 766 


4,429 


51, 337 


38, 874 


3,776 


35, 098 


5,86412,816 


704 


2,112 | 


3,048 


754 


2,294 


July.. 


94, 446 


55,531 


4,317 


51,214 


38,915 


3,755 


35, 160 


6, P6 2, 971 


784 


2,187 


3,205 


792 


2,413 


Aug.. 


94, 723 


55, 580 


4,365 


51,215 


39. 143 


3,831 


35,312 


5,940 2,937 


756 


2, 181 


3,003 


772 


2,231 


Sept. 


95,010 


55, 594 


4,307 


51,287 


39,416 


3,725 


35,691 


5, 964 2, 965 


793 


2,172 


2,999 


769 


2,230 


Oct.. 


95, 241 


55, 754 


4,306 


51,448 


39, 487 


3,761 


35, 726 


5,836 2,971 


826 


2,145 


2,865 


731 


2,134 


Nov.. 


95, 751 


56, 096 


4,271 


51,825 


39, 655 


3,768 


35, 887 


5, 877 2, 923 


810 1 


2,113 


2,954 


746 


2,208 


Dec. 


95, 855 


56, 072 


4,234 


51,838 


39, 783 


3,793 


35, 990 


6,012 3,044 1 

i I 


849 


2, 195 


2,968 


741 


2,227 



'See footnote 3, Table B-27. 

Note— See Note, Table B-27. 

Source: Department of Labor, Bureau of Labor Statistics. 



216 



Table B-29. — Selected employment and unemployment data, 1948-78 
IPercent 1 ; monthly data seasonally adjusted] 





Unemployment rate' 






percent 












































of population 


» 




All 


By 


sex and age 




By selected groups 










Year or month 








Expe- 


















work- 
ers 


Both 
sexes 
16-19 
years 


Males 
20 

years 
and 
over 


Females 

20 

years 

and 

over 


rienced 
wage 
and 
salary 
work- 
ers 


Mar- 
ried 

men' 


Women 
who 
head 

families 


Full- 
time 
work- 
ers • 


Blue- 
collar 
work- 
ers * 


Total 


White 


Black 
and 
other 


1948 


3.8 
5.9 

5.3 
3.3 
3.0 
2.9 
5.5 
4.4 
4.1 


9.2 
13.4 

12.2 
8.2 
8.5 
7.6 
12.6 
11.0 
11.1 


3.2 
5.4 

4.7 
2.5 
2.4 
2.5 
4.9 
3.8 
3.4 


3.6 
5.3 

5.1 
4.0 
3.2 
2.9 
5.5 
4.4 
4.2 


4.3 
6.8 

6.0 
3.7 
3.3 
3.2 
6.2 
4.8 
4.4 








4.2 
8.0 

7.2 
3.9 
3.6 
3.4 
7.2 
5.8 
5.1 


55.8 
54.6 

55.2 
55.7 
55.4 
55.3 
53.8 
55.1 
56.1 






1949 


3.5 

4.6 
1.5 
1.4 
1.7 
4.0 
2.8 
2.6 




5.4 

5.0 
2.6 
2.5 






1950 






1951 






1952 






1953 






1954 




5.2 
3.8 
3.7 






1955 






1956 






1957 


4.3 
6.8 
5.5 

5.5 
6.7 
5.5 
5.7 
5.2 
4.5 
3.8 
3.8 
3.6 
3.5 

4.9 
5.9 
5.6 
4.9 
5.6 
8.5 
7.7 


11.6 
15.9 
14.6 

14.7 
16.8 
14.7 
17.2 
16.2 
14.8 
12.8 
12.8 
12.7 
12.2 

15.2 

16.9 
16.2 
14.5 
16.0 
19.9 
19.0 


3.6 
6.2 

4.7 

4.7 
5.7 
4.6 
4.5 
3.9 
3.2 
2.5 
2.3 
2.2 
2.1 

3.5 
4.4 
4.0 
3.2 
3 8 
6.7 
5.9 


4.1 
6.1 
5.2 

5.1 
6.3 
5.4 
5.4 
5.2 
4.5 
3.8 
4.2 
3.8 
3.7 

4.8 
5.7 
5.4 
4.8 
5.5 
8.0 
7.4 


4.6 
7.2 
5.7 

5.7 
6.8 
5.6 
5.5 
5.0 
4.3 
3.5 
3.6 
3.4 
3.3 

4.8 
5.7 
5.3 
4.5 
5.3 
8.2 
7.3 


2.8 
5.1 
3.6 

3.7 
4.6 
3.6 
3.4 
2.8 
2.4 
1.9 
1.8 
1.6 
1.5 

2.6 
3.2 
2.8 
2.3 
2.7 
5.1 
4.2 




4.0 
7.2 


6.2 
10.2 
7.6 

7.8 
9.2 
7.4 
7.3 
6.3 
5.3 
4.2 
4.4 
4.1 
3.9 

6.2 
7.4 
6.5 
5.3 
6.7 
11.7 
9.4. 


55.7 
54.2 
54.8 

54.9 
54.2 
54.2 
54.1 
54.5 
55.0 
55.6 
55.8 
56.0 
56.5 

56.1 
55.5 
56.0 
56.9 
57.0 
55.3 
56.1 






1958 






1959 






1960 










1961 




6.7 






1962 






1963 


4.9 
4.4 
4.4 

5.4 
7.3 
7.2 
7.0 
7.0 
10.0 
10.0 


5.5 
4.9 
4.2 
3.5 
3.4 
3.1 
3.1 

4.5 
5.5 
5.1 
4.3 
5.1 
8.1 
7.3 


54.0 
54.3 
54.8 
55.4 
55.7 
55.9 
56.5 

56.2 
55.7 
56.4 
57.3 
57.5 
55.9 
56.8 


55.2 


1964 


56.1 


1965 


56.8 


1966 


57.2 


1967 


56.9 


1968 


56.6 


1969 


56.7 


1970 


55.5 


1971 


53.7 


1972 


53.0 


1973 


53.9 


1974 


53.0 


1975 


50.0 


1976 


50.6 


1977... . 


7.0 
6.0 

7.4 


17.7 
16.3 

18.8 


5.2 
4.2 

5.7 


7.0 
6.0 

7.0 


6.6 
5.6 

7.0 


3.6 
2.8 

4.0 


9.3 
8.5 

9.5 


6.5 

5.5 

6.9 


8.1 

6.9 

8.6 


57.1 
58.6 

56.3 


57.9 
59.3 

57.1 


51.1 


1978 


53.3 


1977: Jan 


50.8 


Feb _ 


7.5 


18.4 


5.9 


7.2 


7.2 


4.1 


9.5 


7.0 


8.8 


56.5 


57.3 


50.9 


Mar 


7.4 


18.4 


5 5 


7.3 


6.9 


3.8 


9.8 


6.8 


8.5 


56.7 


57.5 


50.8 


Apr 


7.2 


18.0 


5 3 


7.1 


6.7 


3.7 


9.4 


6.7 


8.1 


56.8 


57.7 


50.9 


May 


7.1 


18.1 


5.4 


6.8 


6.7 


3.7 


9.0 


6.6 


8.0 


57.0 


57.8 


50.7 


June 


7.2 


18.8 


5.1 


7.1 


6.6 


3.5 


9.4 


6.6 


8.0 


57.1 


58.0 


51.2 


July 


6.9 


17.3 


5.1 


6.9 


6.4 


3.4 


9.1 


6.5 


8.0 


57.1 


57.9 


50.8 


Aug 


7.0 


17.4 


5.1 


7.0 


6.5 


3.5 


9.8 


6.5 


8.2 


57.2 


58.1 


50.7 


Sept 


6.8 


18.0 


4.7 


6.9 


6.3 


3.3 


10.2 


6.3 


7.6 


57.3 


58.2 


51.0 


Oct 


6.8 


17.2 


4.9 


6.8 


6.4 


3.5 


9.3 


6.4 


7.9 


57.3 


58.3 


50.9 


Nov 


6.7 


17.2 


4.7 


6.9 


6.3 


3.3 


9.2 


6.2 


7.5 


57.8 


58.7 


51.5 


Dec 


6.3 


15.4 


4.5 


6.5 


5.9 


3.1 


7.8 


5.8 


7.0 


57.9 


58.7 


52.6 


1978: Jan 


6.3 


16.4 


4.6 


6.2 


5.9 


3.1 


8.2 


5.9 


7.3 


58.1 


58.9 


52.4 


Feb 


6.1 


17.2 


4.5 


5.8 


5.7 


2.9 


7.7 


5.7 


7.2 


58.1 


58.8 


53.0 


Mar 


6.2 


17.0 


4.5 


5.9 


5.7 


3.0 


8.7 


5.6 


7.2 


58.2 


58.9 


52.9 


Apr 


6.1 


16.7 


4.3 


6.0 


5.6 


2.8 


10.1 


5.5 


6.7 


58.4 


59.1 


52.9 


N.ay 


6.1 


16.5 


4.2 


6.2 


5.7 


2.9 


9.3 


5.6 


6.7 


58.5 


59.2 


53.0 


June 


5.8 


15.1 


4.0 


6.1 


5.4 


2.7 


8.8 


5.3 


6.6 


58.8 


59.6 


53.4 


July 


6.1 


16.3 


4.1 


6.4 


5.7 


2.7 


9.8 


5.7 


6.7 


58.6 


59.3 


53.2 


Aug 


5.9 


15.7 


4.1 


5.9 


5.5 


2.8 


8.0 


5.4 


6.9 


58.7 


59.4 


53.5 


Sept 


5.9 


16.3 


4.1 


5.9 


5.6 


2.6 


8.0 


5.4 


6.8 


58.8 


59.5 


53.9 


Oct 


5.8 


16.2 


4.0 


5.6 


5.4 


2.6 


7.5 


5.2 


6.8 


58.9 


59.6 


53.9 


Nov 


5.8 


16.2 


3.9 


5.8 


5.4 


2.4 


7.7 


5.2 


6.4 


59.1 


59.9 


53.7 


Dec 


5.9 


16.5 


4.1 


5.8 


5.6 


2.5 


7.7 


5.3 


6.8 


59.1 


59.9 


53.7 



i Unemployment as percent of civilian labo' force in group specified. 

2 Married men living with their wives. Data for 1949 and 1951-54 are for April; 1950, for March. 
» Data for 1949-61 are for May. 

« Includes craft and kindred workers, operatives, and nonfarm laborers. Data for 1948-57 are based on data for 
January, April, July, and October. 
* Civilian employment as percent cf total noninstitutional population. 

Note— See footnote 3 and Note, Table B-27. 

Source: Department of Labor, Bureau of Labor Statistics. 

217 



Table B-30. — Unemployment rate by demographic characteristic, 1948-78 
[Percent '; monthly data seasonally adjusted) 





White 


Black and other 


Year or month 


Total 


Males 


Females 


Total 


Males 


Females 


Total 


16-19 
years 


20 
years 
and 
over 


Total 


16-19 
years 


20 
years 
and 
over 


Total 


16-19 
years 


20 
years 
and 
over 


Total 


16-19 
years 


20 
years 
and 
over 


1948 


3.5 

5.6 

4.9 
3.1 
2.8 
2.7 
5.0 

3.9 

3.6 
3.8 
6.1 
4.8 

4.9 
6.0 
4.9 
5.0 

4.6 

4.1 
3.3 
3.4 
3.2 
3.1 

4.5 
5.4 
5.0 
4.3 
5.0 

7.8 
7.0 
6.2 
5.2 

6.8 
6.8 
6.6 
6.4 
6.3 
6.4 

6.0 
6.1 
6.0 
5.9 
5.8 
5.4 

5.5 
5.4 
5.3 
5.2 
5.3 
5.0 

5.2 
5.2 
5.2 
5.1 
5.0 
5.2 














5.9 
8.9 

9.0 
5.3 
5.4 
4.5 
9.9 

8.7 
8.3 
7.9 
12.6 
10.7 

10.2 
12.4 
10.9 
10.8 
9.6 

8.1 
7.3 
7.4 
6.7 

6.4 

8.2 
9.9 
10.0 
8.9 
9.9 

13.9 
13.1 
13.1 
11.9 

12.7 
13.2 
12.9 
12.4 
12.9 
13.3 

13.1 

14.1 
13.2 
13.6 
13.5 
12.6 

12.8 
11.9 
12.5 
12 
12.3 
12.0 

12.3 
11.5 
11.3 
11.3 
11.7 
11.5 














1949 


























1950 


























1951... 


























1952 


























1953... 


























1954 


4.8 

3.7 
3.4 
3.6 
6.1 
4.6 

4.8 
5.7 
4.6 
4.7 
4.1 

3.6 
2.8 
2.7 
2.6 
2.5 

4.0 
4.9 
4.5 
3.7 
4.3 

7.2 
6.4 
5.5 
4.5 

6.1 
6.2 
5.9 
5.7 
5.7 
5.7 

5.3 
5.3 
5.1 
5.1 
5.0 
4.7 

4.8 
4.8 
4.8 
4.5 
4.4 
4.2 

4.4 
4.4 
4.5 
4.5 
4.2 
4.5 


13.4 

11.3 

10.5 
11.5 
15.7 
14.0 

14.0 
15.7 
13.7 
15.9 
14.7 

12.9 
10.5 
10.7 
10.1 
10.0 

13.7 
15.1 
14.2 
12.3 
13.5 

18.3 
17.3 
15.0 
13.5 

16.1 
16.0 
15.9 
15.0 
15.2 
16.8 

13.9 
14.8 
15.4 
14.1 
14.0 
12.4 

13.0 
14.4 
14.1 
13.6 
12.7 
11.9 

12.8 
13.2 
13.5 
14.3 
13.4 
14.6 


4.4 

3.3 
3.0 
3.2 
5.5 
4.1 

4.2 
5.1 
4.0 
3.9 
3.4 

2.9 
2.2 
2.1 
2.0 
1.9 

3.2 
4.0 
3.6 
2.9 
3.5 

6.2 
5.4 
4.6 

3.7 

5.2 
5.3 
4.9 
4.9 
4.8 
4.6 

4.5 
4.4 
4.2 
4.3 
4.1 
4.0 

4.0 
3.9 
3.9 
3.7 
3.7 
3.5 

3.6 
3.6 
3.6 
3.5 
3.4 
3.5 


5.5 

4.3 
4.2 
4.3 
6.2 
5.3 

5.3 
6.5 
5.5 
5.8 
5.5 

5.0 
4.3 
4.6 
4.3 
4.2 

5.4 
6.3 
5.9 
5.3 
6.1 

S.6 
7.9 
7.3 
6.2 

7.7 
7.7 
7.7 
7.5 
7.2 
7.5 

7.1 
7.2 
7.2 
7.1 
7.0 
6.5 

6.5 

6.2 
6.0 
6.3 
6.5 
6.2 

6.5 
6.3 
6.2 
5.9 
6.0 
6.1 


10.4 

9.1 
9.7 

9.5 
12.7 
12.0 

12.7 

14.8 
12.8 
15.1 
14.9 

14.0 
!2.1 
11.5 
12.1 
11.5 

13.4 

15.1 
14.2 
13.0 
14.5 

17.4 
16.4 
15.9 
14.4 

17.7 
16.6 
16.9 
16.7 
16.8 
15.9 

15.3 
14.7 
16.0 
15.6 
15.4 
12.8 

14.6 
14.8 
14.7 
14.7 
15.0 
12.9 

14.5 
14.4 
14.8 
13.7 
14.3 
13.8 


5.1 

3.9 
3.7 
3.8 
5.6 
4.7 

4.6 
5.7 
4.7 
4.8 
4.6 

4.0 
3.3 
3.8 
3.4 
3.4 

4.4 
5.3 
4.9 
4.3 

5.0 

7.5 
6.8 
6.2 
5.2 

6.5 
6.6 
6.6 
6.3 
6.1 
6.5 

6.1 
6.2 
6.1 
6.1 
6.0 
5.7 

5.6 
5.2 
5.0 
5.2 
5.5 
5.4 

5.5 
5.2 
5.2 
4.9 
5.0 
5.1 


10.3 

8.8 
7.9 
8.3 
13.7 
11.5 

10.7 
12.8 
10.9 
10.5 
8.9 

7.4 
6.3 
6.1 
5.6 
5.3 

7.3 
9.1 
8.9 
7.6 
9.1 

13.7 

12.7 
12.4 
10.9 

12.1 
12.4 
12.2 
10.7 
12.3 
12.3 

12.8 
14.0 
12.6 
13.4 
12.2 
11.4 

12.0 
11.3 
11.3 
11.2 
11.3 
10.3 

10.6 
10.4 
10.4 
10.3 
10.9 
10.6 


14.4 

13.4 
15.0 
18.4 
26.8 
25.2 

24.0 
26.8 
22.0 
27.3 
24.3 

23.3 
21.3 
23.9 
22.1 
21.4 

25.0 
28.9 
29.7 
26.9 
31.6 

35.4 
35.4 
37.0 
34.4 

34.8 
38.2 
39.1 
34.8 
37.8 
36.6 

39.1 
38.4 
34.7 
36.4 
38.2 
36.2 

36.9 
35.8 
37.1 
34.1 
37.4 
32.2 

32.3 
28.5 
33.8 
31.8 
37.9 
34.6 


9.9 

8.4 
7.4 
7.6 
12.7 
10.5 

9.6 

11.7 
10.0 
9.2 
7.7 

6.0 
4.9 
4.3 
3.9 
3.7 

5.6 
7.2 
6.8 
5.7 
6.8 

11.7 

10.6 
10.0 
8.6 

10.0 
10.0 
9.8 
8.6 
10.0 
10.0 

10.2 
11.4 
10.5 
11.2 
9.6 
8.9 

9.6 
8.8 
8.8 
8.9 
8.8 
8.2 

8.3 
8.7 
8.2 
8.3 
8.3 
8.4 


9.2 

8.5 
8.9 
7.3 
10.8 
9.4 

9.4 
11.9 
11.0 
11.2 
10.7 

9.2 
8.7 
9.1 
8.3 
7.8 

9.3 

10.8 
11.3 
10.5 
10.7 

14.0 
13.6 
14.0 
13.1 

13.4 
14.1 
13.8 
14.4 
13.7 
14.4 

13.4 
14.2 
13.8 
13.8 
15.0 
13.9 

13.6 
12.6 
13.8 
12.8 
13.5 
13.9 

14.2 
12.7 
12.2 
12.5 
12.5 
12.5 


20.6 

19.2 
22.8 
20.2 
28.4 
27.7 

24.8 
29.2 
30.2 
34.7 
31.6 

31.7 
31.3 
29.6 
28.7 
27.6 

34.4 
35.4 
38.5 
34.5 
34.6 

38.5 
39.0 
39.9 
38.4 

38.2 
36.7 
37.6 
37.5 
39.0 
42.9 

41.1 
41.4 
41.1 
40.3 
40.7 
40.9 

41.3 
41.0 
40.4 
37.0 
39.2 
41.5 

40.4 
36.6 
36.0 
37.5 
35.0 
35.3 


8.4 


1955 


7.7 


1956 


7.8 


1957 


6.4 


1958 >... 

1959 


9.5 
8.3 


1960 


8.3 


1961 


10.6 


1962.... 


9.6 


1963 


9.4 


1964 


9.0 


1965 


7.5 


1966 


6.6 


1967 

1968 


7.1 

6.3 


1969 


5.8 


1970 

1971 


6.9 

8.7 


1972 


8.8 


1973 .. 


8.2 


1974... 

1975. 


8.4 
11.5 


1976 


11.3 


1977 


11.7 


1978 


10.6 


1977: Jan 

Feb.... 

Mar 

Apr 

May 

June... 

July.... 

Aug 

Sept.... 
Oct 

Nov 

Dec 

1978: Jan 

Feb.... 

Mar 

Apr 

May 

June... 

July.... 

Aug 

Sept.... 

Oct 

Nov 

Dec 


11.2 
12.2 
11.8 
12.3 
11.7 
11.6 

10.9 
11.7 
11.3 
11.3 
12.6 
11.4 

11.1 
10.0 
11.3 
10.6 
10.9 
11.1 

11.4 
10.3 
10.0 
10.1 
10.3 
10.2 



> Unemployment as percent of civilian labor force in group specified. 

Note.— See footnote 3 and Note, Table B-27. 

Source: Department of Labor, Bureau of Labor Statistics. 



218 



Table B-31. — Unemployment by duration, 1947— 78 
[Monthly data seasonally adjusted >] 



Year or month 



1947 

1948 

1949 

1950 

1951 

1952 

1953 

1954 

1955 

1956 

1957 

1958 

1959 

1960 

1961 

1962 

1963 

1964 

1965 

1966 

1967 

1968 

1969 

1970 

1971 

1972 

1973 

1974 

1975 

1976 

1977 

1978 

1977: Jan. 
Feb. 
Mar. 
Apr. 
May. 
June 

July. 
Aug. 
Sept. 
Oct.. 
Nov. 
Dec. 

1978: Jan.. 
Feb. 
Mar. 
Apr. 
May. 
June 

July. 
Aug. 
Sept 
Oct. 
Nov. 
Dec. 



Total un- 
employ- 
ment 



Duration of unemployment 



Less than 
5 weeks 



5-14 
weeks 



15-26 

weeks 



27 weeks 
and over 



Thousands of persons 16 years of age and over 



2,311 


1,210 


2,276 


1,300 


3,637 


1,756 


3,288 


1,450 


2,055 


1,177 


1,883 


1,135 


1,834 


1,142 


3,532 


1,605 


2,852 


1,335 


2,750 


1,412 


2,859 


1,408 


4,602 


1,753 


3,740 


1,585 


3,852 


1,719 


4,714 


1,806 


3,911 


1,663 


4,070 


1,751 


3,786 


1,697 


3,366 


1,628 


2,875 


1,573 


2,975 


1,634 


2,817 


1,594 


2,832 


1,629 


4,088 


2,137 


4,993 


2,234 


4,840 


2,223 


4,304 


2,196 


5,076 


2,567 


7,830 


2,894 


7,288 


2,790 


6,855 


2,856 


6,047 


2,793 


7,115 


2,820 


7,268 


2,928 


7,151 


2,913 


6,944 


3,011 


6,896 


2,727 


7,008 


3,115 


6,706 


2,774 


6,795 


2,839 


6,624 


2,776 


6,654 


2,822 


6,635 


2,851 


6,187 


2,645 


6,292 


2,742 


6,092 


2,649 


6,153 


2,789 


6,063 


2,747 


6,156 


2,862 


5,864 


2,772 


6,176 


2,967 


5,940 


2,795 


5,964 


2,783 


5,836 


2,719 


5,877 


2,833 


6,012 


2,876 



704 

669 

1,194 

1,055 
574 
516 
482 

1,116 

815 

805 

891 

1,396 

1,114 

1,176 
1,376 
1,134 
1,231 
1,117 

983 
779 
893 
810 
827 

1,289 
1,578 
1,459 
1,296 
1,572 

2,452 
2,159 
2,089 
1,875 

2,153 
2,192 
2,168 
1,960 
2,170 
2,045 

2,059 
2,152 
2,091 
2,081 
1,978 
1,913 

1,903 
1,880 
1,909 
1,856 
1,842 
1,908 

1,873 
1,895 
1,861 
1,789 
1,774 
1,979 



234 
193 
428 

425 
166 
148 
132 
495 

366 
301 
321 
785 
469 

503 
728 
534 
535 
491 

404 
287 
271 
256 
242 

427 
665 
597 
475 
563 

1,290 

1,003 

896 

746 

993 
954 
878 
822 
860 
850 

891 

931 
882 
882 
890 
813 

838 
894 
787 
809 
723 
674 

668 
625 
663 
732 
685 
726 



164 
116 
256 

357 
137 
84 
78 
317 

336 
232 

239 
667 
571 

454 
804 
585 
553 
482 

351 
239 
177 
156 
133 

235 
517 
562 
337 
373 

1,193 

1,336 

1,015 

633 

1,199 
1,202 
1,153 
1,119 
1,059 
978 

965 
899 
924 
900 
871 
835 

803 
665 
701 
677 
681 
592 

646 
609 
605 
585 
511 
482 



Average 
(mean) 

duration 
in weeks 



1 Because of independent seasonal adjustment of the various series, detail will not add to totals. 

Note.— See footnote 3 and Note, T3ble B 27. 

Source: Department of Labor, Bureau of Labor Statistics. 



219 



Table B-32. — Unemployment by reason, 1967-78 
[Monthly data seasonally adjusted >] 



Year or month 



Total 
unemployment 



Job 
losers 



Job 
leavers 



Reentrants 



Thousands of persons 16 years of age and over 



1967 

1968 

1969 

1970 

1971..... 

1972 

1973 

1974 

1975 

1976 

1977 

1978 

1978: Jan. 
Feb. 
Mar. 
Apr. 
May. 
June 

July. 
Aug. 
Sept 
Oct. 
Nov. 
Dec. 



1967 

1968 

1969 

1970 

1971 

1972 

1973 

1974 

1975 

1976 

1977 

1978 

1978: Jan. 
Feb. 
Mar. 
Apr. 
May. 
June 

July. 
Aug. 
Sept 
Oct. 
Nov. 
Dec. 



2,975 


1,229 


438 


945 


396 


2,817 


1,070 


431 


909 


407 


2,832 


1,017 


436 


965 


413 


4,088 


1,809 


549 


1,227 


503 


4,993 


2,313 


587 


1,466 


627 


4,840 


2,089 


635 


1,444 


672 


4,304 


1,666 


674 


1,323 


642 


5,076 


2,205 


756 


1,441 


672 


7,830 


4,341 


812 


1,865 


812 


7,288 


3,625 


886 


1,895 


882 


6,855 


3,103 


889 


1,926 


938 


6,047 


2,514 


851 


1,814 


867 


6,292 


2,711 


861 


1,812 


915 


6,092 


2,589 


896 


1,802 


880 


6,153 


2,562 


858 


1,878 


912 


6,063 


2,556 


877 


1,750 


905 


6,156 


2,614 


828 


1,793 


892 


5,864 


2,379 


853 


1,785 


816 


6,176 


2,536 


855 


1,870 


871 


5,940 


2,459 


840 


1,743 


875 


5,964 


2,362 


849 


1,930 


816 


5,836 


2,456 


812 


1,721 


825 


5,877 


2,372 


825 


1,754 


872 


6,012 


2,442 


871 


1,937 


826 




Percer 


t of civilian labor force 





3.8 
3.6 
3.5 

4.9 
5.9 
5.6 
4.9 
5.6 

8.5 
7.7 
7.0 
6.0 

6.3 
6.1 
6.2 
6.1 
6.1 
5.8 

6.1 
5.9 
5.9 
5.8 
5.8 
5.9 



1.6 
1.3 
1.2 

2.2 
2.8 
2.4 
1.9 
2.4 

4.7 
3.8 
3.2 
2.5 

2.7 
2.6 
2.6 
2.6 
2.6 
2.4 

2.5 
2.4 
2.3 
2.4 
2.3 
2.4 



0.6 
.5 



1 Because of independent seasonal adjustment of the various series, detail will not add to totals. 

Note.— See footnote 3 and Note, Table B-27. 

Source: Department of Labor, Bureau of Labor Statistics. 



220 



Table B-33. — Unemployment insurance programs, selected data, 1946-78 



All programs 



Covered 
employ- 
ment' 



Insured 
unem- 
ploy- 
ment 
(weekly 
aver- 
age)" 



Thousands 



31, 856 
33, 876 
34, 646 
33,098 

34, 308 
36, 334 
37, 006 
38, 072 
36, 622 
40, 018 
42, 751 
43, 436 
44,411 
45, 728 

46, 334 
46, 266 
47, 776 
48, 434 
49, 637 
51, 580 
54,739 
56, 342 
57, 977 
59,999 

59, 526 
59, 375 

66. 458 
69, 897 
72,451 
71, 037 

73. 459 
•76,419 



2,804 
1,793 
1,446 
2,474 

1,605 
1,000 
1,069 
1,067 
2,051 
1,399 
1,323 
1,571 
3,269 
2,099 

2,071 
2,994 
1,946 
'1,973 
1,753 
1,450 
1,129 
1,270 
1,187 
1,177 

2,070 
2,608 
2,192 
1,793 
2,558 
4,937 
3,846 
3,111 
2,640 

4,442 
4,448 
3,972 
3,506 
3,105 
2,939 

3,065 
2,751 
2,643 
2,649 
2,853 
3,226 

3,781 
3,638 
3,212 
2,659 
2,369 
2,297 

2,581 
2,394 
2,064 
1,999 
2,148 
2,545 



Total 

benefits 

paid 
(millions 
of dol- 
lars)' * 



2, 878. 5 
1, 785. 5 
1,328.7 
2, 269. 8 

1,467.6 
862.9 

1. 043. 5 

1. 050. 6 
2,291.6 
1,560.2 
1,540.6 
1,913.0 
4,290.6 
2, 854. 3 

3. 022. 8 
4, 358. 1 
3, 145. 1 

3. 025. 9 
2,749.2 
2,360.4 
1,890.9 
2,221.5 

2. 191. 
2,298.6 

4, 209. 3 
6,154.0 

5. 491. 1 
4, 517. 3 
6,933.9 

16, 802. 4 
12, 344. 8 
10, 998. 9 



1,212.0 

1,214.5 

1,317.2 

998.5 

886.4 

883.4 

784.5 
824.8 
712.2 
712.9 
795.8 
896.2 

1,091.0 

1,053.6 

1,128.9 

805.4 

753.9 

706.7 

663.8 
771.5 
595.6 
597.4 



State programs 



Insured 
unem- 
ploy- 
ment 



Initial 
claims 



Ex- 
haus- 
tions! 



Weekly average; thousands 



1,295 


189 


997 


187 


980 


200 


1,973 


340 


1,513 


236 


969 


208 


1,044 


215 


990 


218 


1,870 


304 


1,265 


226 


1,215 


227 


1,446 


270 


2,526 


369 


1,684 


277 


1,908 


331 


2,290 


350 


1,783 


302 


t 1, 806 


1298 


1,605 


268 


1,328 


232 


1,061 


203 


1,205 


226 


1,111 


201 


1,101 


200 


1,805 


296 


2,150 


295 


1,848 


261 


1,632 


247 


2,262 


363 


3,986 


478 


2,991 


386 


2,655 


375 


2,356 


342 

• 


2,835 


410 


2,811 


427 


2,678 


354 


2,665 


381 


2,627 


384 


2,623 


370 


2,610 


374 


2,651 


371 


2,605 


364 


2,570 


360 


2,551 


353 


2,487 


351 


2,482 


346 


2,518 


368 


2,452 


339 


2,307 


338 


2,223 


331 


2,247 


347 


2,374 


364 


2,448 


345 


2,292 


326 


2,234 


325 


2,230 


338 


2,252 


339 



Insured 
unem- 
ploy- 
ment as 
percent of 
covered 
employ- 
ment 



4.3 
3.1 
3.0 
6.2 

4.6 
2.8 
2.9 
2.8 
5.2 
3.5 
3.2 
3.6 
6.4 
4.4 

4.8 
5.6 
4.4 
4.3 
3.8 
3.0 
2.3 
2.5 
2.2 
2.1 

3.4 
4.1 
3.5 
2.7 
3.5 
6.0 
4.6 
3.9 
3.3 

• 

4.3 
4.2 
4.2 
4.0 
3.9 
3.9 

3.8 
3.9 
3.8 
3.8 
3.7 
3.6 

3.6 
3.6 
3.5 
3.3 
3.2 
3.2 

3.4 
3.5 
3.2 
3.0 
3.0 
3.1 



Benefits paid 



Total 
(mil- 
lions 
of 
dol- 
lars) « 



1, 094. 9 
775.1 
789.9 

1. 736. 

1. 373. 1 
840.4 
998.2 
962.2 

2,026.9 

1. 350. 3 
1,380.7 
1,733.9 
3, 512. 7 

2. 279. 

2,726.7 
3,422.7 

2. 675. 4 
2,774.7 

2. 522. 1 
2,166.0 
1,771.3 
2, 092. 3 
2,031.6 
2,127.9 

3,848.5 
4,957.0 
4,471.0 
4, 007. 6 
5,974.9 
11, 754. 7 
8, 974. 5 

8. 357. 2 



955.3 
975.6 
1, 034. 1 
763.7 
666.0 
658.3 

592.4 
671.3 
565.2 
525.8 
599.5 
703.0 

909.4 
918.8 
1,001.5 
708.0 
639.8 
580.0 

557.0 
677.8 
521.0 
515.2 



Average 
weekly 
check 
(dol- 
lars)* 



* Monthly data are seasonally adjusted. 

1 Includes persons under the State, UCFE (Federal employee, effective January 1955), and RRB (Railroad Retirement 
Board) programs. Beginning October 1958, also includes the UCX program (unemployment compensation for ex-servicemen). 

' Includes State, UCFE, RR, UCX, UCV (unemployment compensation for veterans, October 1952-January 1960), and 
SRA (Servicemen's Readjustment Act, September 1944-September 1951) programs. Also includes Federal and State 
extended benefit programs. Does not include FSB (Federal supplemental benefits) and SUA (special unemployment 
assistance) programs. 

5 Covered workers who have completed at least 1 week of unemployment. 

* Annual data are net amounts and monthly data are gross amounts. 
1 Individuals receiving final payments in benefit year. 

8 For total unemployment only. 

7 Programs include Puerto Rican sugarcane workers for initial claims and insured unemployment beginning July 1963. 
> Latest data available for all programs combined. Workers covered by State programs account for about 97 percent of 
the total. 

Source: Department of Labor, Employment and Training Administration. 

221 



Table B-34. — Wage and salary workers in nonagricultural establishments, 1929-78 
[Thousands of persons; monthly data seasonally adjusted] 





Total 
wage 
and 
salary 
work- 
ers 


Manufacturing 


Min- 
ing 


Con- 
struc- 
tion 


Trans- 
porta- 
tion 
and 
pub- 
lic 

utili- 
ties 


Whole- 
sale 
and 
retail 
trade 


Fi- 
nance, 
insur- 
ance, 
and 
real 
estate 


Serv- 
ices 


Government 


Year or 
month 


Total 


Dura- 
ble 
goods 


Non- 
dura- 
ble 
goods 


Fed- 
eral 


State 
and 
local 


1929 


31,324 


10, 702 






1,087 


1,512 


3,916 


6,123 


1,494 


3,425 


533 


2,532 


1933 


23, 699 
30, 603 


7,397 






744 


824 


2,672 


4,755 


1,280 


2,861 


565 


2,601 


1939 


10, 278 


4,715 


5,564 


854 


1,165 


2,936 


6,426 


1,447 


3,502 


905 


3,090 


1940 

1941 

1942 

1943 

1944. 


32, 361 
36, 539 
40, 106 
42, 434 
41,864 


10, 985 
13, 192 
15,280 
17,602 
17, 328 


5,363 
6,968 
8,823 
11,084 
10, 856 


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


925 

957 
992 
925 
892 


1,311 
1,814 
2,198 
1,587 
1,108 


3,038 
3,274 
3.460 
3,647 
3,829 


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


1,485 
1,525 
1,509 
1,481 
1,461 


3,665 
3,905 
4,066 
4,130 
4,145 


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, 374 

41, 652 

43, 857 

44, 866 
43, 754 


15, 524 
14.703 
15. 545 
15, 582 
14,441 


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


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


836 
862 
955 
994 
930 


1,147 
1,683 
2,009 
2,198 
2,194 


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


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


1,481 
1,675 
1,728 
1,800 
1,828 


4,222 
4,697 
5,025 
5,181 
5,240 


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, 197 
47,819 
48, 793 
50, 202 
48, 990 


15, 241 
16, 393 

16, 633 

17, 549 
16,314 


8,094 
9,089 
9,349 
10,110 
9,129 


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


901 
929 
898 
866 
791 


2,364 
2,637 
2,668 
2,659 
2,646 


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


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


1,888 
1,956 
2,035 
2,111 
2,200 


5,357 
5,547 
5,699 
5,835 
5,969 


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


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


1955 

1956 

1957 

1S58 

1959 


50, 641 
52, 369 

52, 853 

51, 324 

53, 268 


16. 882 
17, 244 
17, 176 
15,945 
16, 675 


9,541 
9,833 
9,855 
8,829 
9,373 


7,341 
7,411 
7,321 
7,116 
7,303 


792 
822 
828 
751 
732 


2,839 
3,039 
2,962 
2,817 
3,004 


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


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


2,298 
2,389 
2,438 
2,481 
2,549 


6,240 
6,497 
6,708 
6,765 
7,087 


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


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


1960 

1961 

1962 

1963 

1964 


54, 189 
53, 999 

55, 549 

56, 653 
58, 283 


16,7% 
16, 326 
16, 853 

16, 995 

17, 274 


9,459 
9.070 
9,480 
9.616 
9,816 


7,337 
7,256 
7,373 
7,380 
7,458 


712 
672 
650 
635 
634 


2,926 
2,859 
2,948 
3,010 
3,097 


4,004 
3,903 
3,906 
3,903 
3,951 


11,391 
11,337 
11,566 
11,778 
12, 160 


2,629 
2,688 
2,754 
2,830 
2,911 


7,378 
7,620 
7,982 
8,277 
8,660 


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


6,083 
6,315 
6,550 
6,868 
7,248 


1965 

1966 

1967 

1968 

1969 


60, 765 
63, 901 
65, 803 
67, 892 
70, 384 


18, 061 
19,213 

19, 447 
19, 781 
20, 167 


10, 405 
11,282 
11,439 
11,626 
11,895 


7,656 
7,930 
8,007 
8,155 
8,272 


632 

627 
613 
606 
619 


3,232 
3,317 
3,248 
3,350 
3,575 


4,036 
4,158 
4,268 
4,318 
4,442 


12,716 
13, 245 

13, 606 
14, 099 

14, 705 


2,977 
3,058 
3,185 
3,337 
3,512 


9,036 
9,498 
10, 045 
10, 567 
11, 169 


2,378 
2,564 
2,719 
2,737 
2,758 


7,696 
8,220 
8,672 
9,102 
9,437 


1970 

1971 

1972 

1973 

1974 


70,880 
71,214 
73, 675 
76, 790 
78, 265 


19, 366 
18, 623 
19, 151 
20, 154 
20, 077 


11, 208 
10, 636 
11,049 
11,891 
11,925 


8,158 
7,987 
8,102 
8,262 
8,152 


623 
609 
628 
642 
697 


3,588 
3,704 
3,889 
4,097 
4,020 


4,515 
4,476 
4,541 
4,656 
4,725 


15, 040 

15, 352 
15,949 

16, 607 
16, 987 


3,645 
3,772 
3,908 
4,046 
4,148 


11,548 
11,797 
12, 276 

12, 857 

13, 441 


2,731 
2,696 
2,684 
2,663 
2,724 


9,823 
10, 185 
10, 649 
11,068 
11,446 


1975.. 

1976 

1977 

1978 p 


76, 945 
79,382 
82, 256 
85, 760 


18, 323 
18,997 

19, 647 

20, 331 


10, 688 
11,077 
11, 573 
12, 159 


7,635 
7,920 
8,074 
8,172 


752 
779 
809 
837 


3,525 
3,576 
3,833 
4,213 


4,542 
4,582 
4,696 
4,858 


17,060 

17, 755 

18, 492 

19, 392 


4,165 
4,271 
4,452 
4,676 


13,892 

14, 551 

15, 249 
15, 976 


2,748 
2,733 
2,727 
2,754 


11,937 
12, 138 
12, 352 
12,723 



See next page for continuation of table. 



222 



Table B-34. — Wage and salary workers in nonagricultural establishments, 
1929-78— Continued 

(Thousands of persons; monthly data seasonally adjustedl 







Manufacturing 






Trans- 




Fi- 
nance, 
insur- 
ance, 
and 
real 
estate 




Government 




Total 
wage 
and 
salary 
work- 
ers 








Min- 
ing 


Con- 
struc- 
tion 


porta- 
tion 
and 
pub- 
lic 
utili- 
ties 


Whole- 
sale 
and 
retail 
trade 


Serv- 
ices 




Year or 
month 


Total 


Dura- 
ble 
goods 


Non- 
dura- 
ble 
goods 


Fed- 
eral 


State 
and 
local 


1976: Jan... 


78, 305 


18,701 


10,817 


7,884 


771 


3,597 


4,536 


17,415 


4,214 


14, 253 


2,749 


12, 069 


Feb... 


78, 530 


18, 799 


10, 890 


7,909 


771 


3,576 


4,546 


17,515 


4,216 


14, 290 


2,743 


12,074 


Mar... 


78, 831 


18, 900 


10, 971 


7,929 


774 


3,561 


4,561 


17, 591 


4,229 


14, 370 


2,735 


12, 110 


Apr... 


79, 169 


19,015 


11,045 


7,970 


774 


3,586 


4,568 


17, 676 


4,242 


14, 452 


2,736 


12, 120 


May. . 


79, 236 


19, 005 


11,087 


7,918 


773 


3,565 


4,566 


17,740 


4,248 


14, 483 


2,732 


12, 124 


June.. 


79, 332 


18, 996 


11,092 


7,904 


777 


3,557 


4,578 


17, 763 


4,264 


14, 544 


2,728 


12, 125 


July... 


79, 478 


19,013 


11, 109 


7,904 


785 


3,572 


4,590 


17, 797 


4,269 


14, 589 


2,726 


12, 137 


Aug... 


79, 596 


19, 028 


11,140 


7,888 


757 


3,568 


4,591 


17,848 


4,274 


14, 634 


2,729 


12, 167 


Sept . . 


79, 836 


19, 136 


11,193 


7,943 


790 


3,563 


4,602 


17, 903 


4,299 


14, 677 


2,728 


12, 138 


Oct... 


79, 804 


19, 022 


11,102 


7,920 


791 


3,573 


4,597 


17, 905 


4,315 


14,714 


2,727 


12, 160 


Nov... 


80, 133 


19, 160 


11,222 


7,938 


793 


3,601 


4,609 


17,930 


4,331 


14, 776 


2,731 


12,202 


Dec... 


80, 306 


19, 190 


11,246 


7,944 


797 


3,592 


4,636 


17,966 


4,347 


14, 840 


2,723 


12,215 


1977: Jan... 


80, 483 


19, 285 


11,308 


7,977 


799 


3,551 


4,640 


18, 030 


4,364 


14, 903 


2,722 


12, 189 


Feb... 


80, 796 


19, 343 


11,336 


8,007 


807 


3,654 


4,652 


18, 122 


4,378 


14, 949 


2,721 


12, 170 


Mar... 


81, 264 


19, 481 


11,445 


8,036 


819 


3,732 


4,659 


18,225 


4,403 


15,025 


2,728 


12, 192 


Apr... 


81, 654 


19, 575 


11,487 


8,088 


825 


3,805 


4,673 


18, 325 


4,417 


15,098 


2,721 


12,215 


May. . 


81, 934 


19, 643 


11,541 


8,102 


824 


3,837 


4,692 


18, 397 


4,426 


15,123 


2,725 


12, 267 


June.. 


82, 277 


19, 697 


11,577 


8,120 


835 


3,871 


4,695 


18, 466 


4,443 


15, 187 


2,735 


12, 348 


July... 


82, 455 


19,722 


11,623 


8,099 


810 


3,902 


4,698 


18, 531 


4,452 


15, 226 


2,724 


12,390 


Aug... 


82, 603 


19, 697 


11,621 


8,076 


795 


3,884 


4,698 


18, 607 


4,468 


15,315 


2,730 


12,409 


Sept.. 


82, 973 


19,715 


11,637 


8,078 


830 


3,896 


4,727 


18,672 


4,487 


15, 442 


2,725 


12,479 


Oct . . . 


83, 199 


19, 769 


11,693 


8,076 


833 


3,905 


4,721 


18, 733 


4,508 


15,510 


2,728 


12, 492 


Nov... 


83, 549 


19, 849 


11,746 


8,103 


840 


3,928 


4,736 


18, 830 


4,535 


15, 568 


2,727 


12, 536 


Dec... 


83, 719 


19, 984 


11,851 


8,133 


687 


3,955 


4,749 


18,911 


4,547 


15,618 


2,723 


12, 545 


1978: Jan... 


83,871 


20, 065 


11,917 


8,148 


678 


3,905 


4,758 


18,991 


4,563 


15, 597 


2,736 


12, 578 


Feb... 


84, 188 


20, 139 


11,986 


8,153 


684 


3,901 


4,782 


19,071 


4,591 


15, 670 


2,736 


12,614 


Mar... 


84, 726 


20, 230 


12,041 


8,189 


698 


3,999 


4,817 


19, 169 


4,605 


15,773 


2,739 


12,696 


Apr... 


85,418 


20, 282 


12, 076 


8,206 


867 


4,164 


4,847 


19, 252 


4,623 


15, 866 


2,745 


12,772 


May... 


85,618 


20, 297 


12, 093 


8,204 


869 


4,175 


4,847 


19, 335 


4,637 


15,896 


2,753 


12, 809 


June.. 


85, 996 


20, 316 


12, 109 


8,207 


879 


4,278 


4,881 


19,412 


4,670 


15, 963 


2,772 


12, 825 


July... 


86, 033 


20, 302 


12,138 


8,164 


882 


4,317 


4,827 


19, 469 


4,690 


15, 989 


2,765 


12,792 


Aug... 


86, 149 


20, 278 


12; 146 


8,132 


887 


4,298 


4,846 


19,523 


4,707 


16,074 


2,765 


12,771 


Sept... 


86, 163 


20, 286 


12, 166 


8,120 


887 


4,298 


4,855 


19, 546 


4,719 


16, 127 


2,752 


12,693 


Oct.... 


86, 573 


20, 436 


12, 305 


8,131 


893 


4,341 


4,922 


19, 632 


4,737 


16, 169 


2,760 


12, 683 


Nov ».. 


87, 020 


20, 600 


12, 409 


8,191 


902 


4,368 


4,945 


19, 697 


4,775 


16,261 


2,757 


12,715 


Dec ".. 


87,270 


20, 724 


12, 490 


8,234 


902 


4,413 


4,965 


19, 687 


4,788 


16, 296 


2,757 


12,738 



Note.— Data in Tables B-34 through B-36 are based on reports from employing establishments and relate to full- and 
part-time wage and salary workers in nonagricultural establishments who worked during or received pay for any part of 
the pay period which includes the 12th of the month. 

Not comparable with labor force data (Tables B-27 through B-32), which include proprietors, self-employed persons 
domestic servants, and unpaid family workers; which count persons as employed when they are not at work because of 
industrial disputes, bad weather, etc., even if they are not paid for the time oft; and which are based on a sample of the 
working-age population, whereas the estimates in this table are based on reports from employing establishments. 

For description and details of the various establishment data, see "Employment and Earnings." 

Source: Department of Labor, Bureau of Labor Statistics. 



223 



Table B-35. — Average weekly hours and hourly earnings in selected private nonagricultural 

industries, 1947-78 

[For production or nonsupervisory workers; monthly data seasonally adjusted] 





Average weekly hoi 


rs 


Average gross hourly earnings 
current dollars 


Adjusted hourly earnings, 
total private nonagricultural * 


Year 

or 

month 


Total 
private 
nonag- 
ricul- 
tural i 


Manu- 
factur- 
ing 


Con- 
struc- 
tion 


Whole- 
sale 
and 
retail 
trade 


Total 

private 

non- 

agri- 
cul- 

tural i 


Manu- 
factur- 
ing 


Con- 
struc- 
tion 


Whole- 
sale 
and 
retail 

trade 


Index, 
1967 = 100 


Percent 
change 
from 
a year 
earlier* 




Cur- 
rent 
dol- 
lars 


1967 
dol- 
lars) 


Cur- 
rent 
dol- 
lars 


1967 
dol- 
lars 


1947 


40.3 
40.0 
39.4 

39.8 
39.9 
39.9 
39.6 
39.1 

39.6 
39.3 
38.8 
38.5 
39.0 

38.6 
38.6 
38.7 
38.8 
38.7 

38.8 
38.6 
38.0 
37.8 
37.7 

37.1 
36.9 
37.0 
36.9 
36.5 

36.1 
36.1 
36.0 
35.8 

35.8 
36.1 
36.1 
36.1 
36.1 
36.0 

36.0 
35.9 
35.9 
36.1 
36.0 
35.9 

35.5 
35.7 
36.0 
36.1 
35.9 
35.9 

35.9 
35.8 
35.8 
35.9 
35.8 
35.8 


40.4 
40.0 
39.1 

40.5 
40.6 
40.7 
40.5 
39.6 

40.7 
40.4 
39.8 
39.2 
40.3 

39.7 
39.8 
40.4 
40.5 
40.7 

41.2 

41.4 
40.6 
40.7 
40.6 

39.8 
39.9 
40.5 
40.7 
40.0 

39.5 
40.1 
40.3 
40.4 

39.7 
40.3 
40.4 
40.4 
40.4 
40.5 

40.3 

40.3 
40.3 
40.5 
40.5 
40.5 

39.8 
40.1 
40.6 
40.8 
40.4 
40.5 

40.5 
40.3 
40.4 
40.5 
40.7 
40.6 


38.2 
38.1 
37.7 

37.4 
38.1 
38.9 
37.9 
37.2 

37.1 
37.5 
37.0 
36.8 
37.0 

36.7 
36.9 
37.0 
37.3 
37.2 

37.4 
37.7 
37.7 
37.3 
37.9 

37.3 
37.2 
36.5 
36.8 
36.6 

36.4 
36.8 
36.5 
36.7 

35.4 
37.3 
37.0 
37.0 
36.8 
36.4 

36.5 
36.1 
36.2 
36.3 
36.4 
36.2 

34.3 
35.6 
36.9 
37.3 
36.6 
37.3 

37.3 
37.1 
37.0 
36.9 
36.7 
36.9 


40.5 
40.4 
40.5 

40.5 
40.5 
40.0 
39.5 
39.5 

39.4 
39.1 
38.7 
38.6 
38.8 

38.6 
38.3 
38.2 
38.1 
38.0 

37.7 
37.1 
36.6 
36.1 
35.7 

35.3 
35.1 
34.9 
34.6 
34.2 

33.9 
33.7 
33.3 
32.8 

33.3 
33.4 
33.4 
33.3 
33.4 
33.2 

33.3 
33.2 
33.2 
33.4 
33.1 
33.1 

32.7 
32.7 
33.0 
33.0 
32.9 
32.8 

32.9 
32.8 
32.8 
32.9 
32.8 
32.7 


$1. 131 
1.225 
1.275 

1.335 

1.45 

1.52 

1.61 

1.65 

1.71 
1.80 
1.89 
1.95 
2.02 

2.09 
2.14 
2.22 
2.28 
2.36 

2.46 
2.56 
2.68 
2.85 
3.04 

3.23 
3.45 
3.70 
3.94 
4.24 

4.53 
4.86 
5.24 
5.68 

5.07 
5.10 
5.14 
5.18 
5.20 
5.23 

5.27 
5.27 
5.31 
5.36 
5.39 
5.41 

5.46 
5.49 
5.54 
5.61 
5.62 
5.66 

5.71 
5.73 
5.77 
5.82 
5.86 
5.90 


$1,216 
1.327 

1.376 

1.440 

1.56 

1.64 

1.74 

1.78 

1.85 
1.95 
2.05 
2.11 
2.19 

2.26 
2.32 
2.39 
2.46 
2.53 

2.61 
2.71 
2.82 
3.01 
3.19 

3.35 
3.57 
3.82 
4.09 
4.43 

4.83 
5.22 
5.67 
6.16 

5.47 
5.49 
5.53 
5.58 
5.61 
5.66 

5.70 
5.72 
5.77 
5.82 
5.85 
5.88 

5.93 
5.98 
6.01 
6.05 
6.08 
6.12 

6.18 
6.20 
6.25 
6.32 
6.37 
6.41 


$1. 540 
1.712 
1.792 

1.863 

2.02 

2.13 

2.28 

2.39 

2.45 
2.57 
2.71 
2.82 
2.93 

3.08 
3.20 
3.31 
3.41 
3.55 

3.70 
3.89 
4.11 
4.41 
4.79 

5.24 
5.69 
6.06 
6.41 
6.81 

7.31 
7.70 
8.09 
8.62 

7.99 
7.97 
8.01 
8.03 
8.03 
8.09 

8.08 
8.11 
8.15 
8.19 
8.20 
8.24 

8.30 
8.35 
8.47 
8.47 
8.59 
8.65 

8.66 
8.72 
8.75 
8.77 
8.83 
8.89 


$0. 940 
1.010 
1.060 

1.100 

1.18 

1.23 

1.30 

1.35 

1.40 
1.47 
1.54 
1.60 
1.66 

1.71 
1.76 
1.83 
1.89 
1.97 

2.04 
2.14 
2.25 
2.41 
2.56 

2.72 
2.88 
3.05 
3.23 
3.48 

3.73 
3.97 
4.27 
4.66 

4.14 
4.16 
4.19 
4.22 
4.24 
4.26 

4.29 
4.30 
4.33 
4.36 
4.39 
4.42 

4.51 
4.50 
4.55 
4.60 
4.60 
4.63 

4.67 
4.70 
4.73 
4.77 
4.81 
4.83 


42.6 
46.0 
48.2 

50.0 
53.7 
56.4 
59.6 
61.7 

63.7 
67.0 
70.3 
73.2 
75.8 

78.4 
80.8 
83.5 
85.9 
88.2 

91.2 
95.3 
100.0 
106.2 
113.2 

120.7 
129.2 
137.5 
146.0 
157.5 

170.7 
183.0 
196.8 
212.6 

191.1 
191.9 
193.0 
194.4 
195.5 
196.4 

197.8 
198.3 
199.6 
201.5 
202.4 
203.5 

206.0 
206.6 
208.3 
210.3 
211.0 
212.3 

214.1 
214.6 
216.2 
218.0 
219.0 
220.2 


63.7 
63.8 
67.5 

69.3 
69.0 
70.9 
74.4 
76.6 

79.4 
82.3 
83.4 
84.5 
86.8 

88.4 
90.2 
92.2 
93.7 
95.0 

96.6 
98.0 
100.0 
101.9 
103.1 

103.8 
106.5 
109.7 
109.7 
106.6 

105.9 
107.3 
108.4 

108.8 
108.2 
108.2 
108.1 
108.1 
108.0 

108.4 
108.3 
108.6 
109.2 
109.3 
109.4 

109.9 
109.5 
109.5 
109.6 
109.0 
108.7 

109.0 
108.7 
108.7 
108.8 
108.7 






1948 


8.0 
*•* 

3.7 
7.4 
5.0 
5.7 
3.5 

3.2 
5.2 
4.9 
4.1 
3.6 

3.4 
3.1 
3.3 
2.9 
2.7 

3.4 
4.5 
4.9 
6.2 
6.6 

6.6 
7.0 
6.4 
6.2 
7.9 

8.4 
7.2 
7.5 
8.1 

7.7 
7.6 
7.7 
7.7 
7.6 
7-8. 

7.8 
7.1 
7.3 
7.6 
7.4 
7.4 

7.8 
7.6 
7.9 
3.2 
8.0 
8.1 

8.2 
8.2 
8.3 
8.2 
8.2 
8.2 


2 


1949 


5 8 


1950 


2 7 


1951 


— 4 


1952 


2 8 


1953 


4 9 


1954 


3 


1955 


3 7 


1956 


3 7 


1957 


1 3 


1958 


1.3 


1959 


2 7 


1960 


1.8 


1961 


2 


1962 

1963 


2.2 
1.6 


1964 


1.4 


1965 


1 7 


1966.. 


1 4 


1967 


2 


1968 


1 9 


1969... 


1 2 


1970... 


.7 


1971 


2.6 


1972 


3.0 


1973 .. 


.0 


1974 


-2.8 


1975 


-.7 


1976 


1.3 


1977 


1.0 


1978" 




1977: Jan 

Feb 

Mar 

Apr 

May 

June 

July 

Aug 

Sept 

Oct. 

Nov 

Dec 

1978: Jan 

Feb 

Mar 

Apr. 

May 

June 

July 

Aug 

Sept 

Oct 

Nov p 

Dec " 


2.4 
1.5 
1.2 
.9 
.8 
.9 

1.0 
.4 
.6 

1.0 
.6 
.6 

1.0 
1.1 
1.2 
1.4 
.9 
.6 

.6 

.4 

.1 

-.4 

-.6 



1 Also includes other private industry groups shown in Table B-34. 

2 Adjusted for overtime (in manufacturing only) and for interindustry employment shifts. 

3 Current dollar earnings index divided by the consumer price index (revised index for urban wage earners and clerical 
workers used beginning 1978). 

« Monthly data are computed from indexes to two decimal places. 

Note.— See Note, Table B-34. 

Source: Department of Labor, Bureau of Labor Statistics. 

224 



Table B-36. 



-Average weekly earnings in selected private nonagricultural industries, 1947-78 
[For production or nonsupervisory workers; monthly data seasonally adjusted! 



Average gross weekly earnings 



Total private 
nonagricultural 1 



Current 
dollars 



$45. 58 
49.00 
50.24 

53.13 
57.86 
60.65 
63.76 
64.52 

67.72 
70.74 
73.33 
75.08 
78.78 

80.67 
82.60 
85.91 
88.46 
91.33 

95.45 
98.82 
101.84 
107.73 
114.61 

119.83 
127.31 
136.90 
145.39 
154. 76 

163. 53 
175.45 
188. 64 
203. 34 

181.51 
184.11 
185. 55 
187. 00 

187. 72 

188. 28 

189. 72 
189. 19 
190. 63 
193. 50 
194. 04 
194.22 

193.83 
195.99 
199. 44 
202. 52 
201.76 
203. 19 

204. 99 
205. 13 
206. 57 

208. 94 

209. 79 
211.22 



1967 
dollars' 



$68. 13 
67.96 
70.36 

73.69 
74.37 
76.29 
79.60 
80.15 

84.44 
86.90 
86.99 
86.70 
90.24 

90.95 
92.19 
94.82 
96.47 
98.31 

101.01 
101.67 
101.84 

103. 39 

104. 38 

103.04 
104. 95 
109. 26 
109. 23 
104. 78 

101.45 
102. 90 
103.93 



103. 37 
103. 84 
104.01 
103.95 
103. 77 
103. 56 

104.01 
103. 33 

103. 72 

104. 93 
104.77 
104. 42 

103. 38 
103. 86 

104. 86 

105. 59 
104. 21 
104. 04 

104. 43 
103.92 
103.91 
104. 26 
104.11 



Manu- 
facturing 



Con- 
struc- 
tion 



Wholesale 

and retail 

trade 



Current dollars 



$49. 13 
53.08 
53.80 

58.28 
63.34 
66.75 
70.47 
70.49 

75.30 
78.78 
81.59 
82.71 
88.26 

89.72 
92.34 
96.56 
99.63 
102.97 

107. 53 
112.19 
114.49 
122.51 
129.51 

133. 33 
142. 44 
154.71 
166. 46 
177.20 

190.75 
209. 32 

228. 50 
248. 86 

217. 16 
221.25 
223.41 
225.43 
226. 64 

229. 23 

229. 71 

230. 52 
232. 53 
235. 71 
236. 93 
238. 14 

236.01 
239. 80 
244.01 

246. 84 
245. 63 

247. 86 

250. 29 
249. 86 
252. 50 
255. 96 

259. 26 

260. 25 



$58. 83 
65.23 
67.56 

69.68 
76.96 
82.86 
86.41 
88.54 

90.90 
96.38 
100.27 
103. 78 
108.41 

113.04 
118.08 
122.47 
127.19 
132.06 

138. 38 
146.65 
154.95 
164. 49 
181.54 

195. 45 
211.67 
221.19 
235. 89 
249. 25 

266. 08 
283. 36 
295. 29 
316.35 

282. 85 
297. 28 
296.37 
297.11 
295. 50 
294.48 

294. 92 
292. 77 

295. 03 

297. 30 

298. 48 
298. 29 

284. 69 
297. 26 
312. 54 
315.93 
314.39 

322. 65 

323. 02 
323. 51 
323. 75 

323. 61 

324. 06 
328. 04 



$38. 07 
40.80 
42.93 

44.55 
47.79 
49.20 
51.35 
53.33 

55.16 
57.48 
59.60 
61.76 
64.41 

66.01 
67.41 
69.91 
72.01 
74.86 

76.91 
79.39 
82.35 
87.00 
91.39 

96.02 
101.09 
106.45 
111.76 
119.02 

126.45 
133.79 
142.19 
152.85 

137.86 
138.94 
139.95 
140. 53 
141.62 
141.43 

142. 86 
142.76 
143.76 
145.62 
145.31 
146.30 

147.48 
147. 15 

150. 15 
151.80 
151.34 
151.86 

153.64 

154. 16 
155.14 
156. 93 
157.77 
157.94 



Percent change from a 

year earlier, total private 

nonagricultural' 



Current 
dollars 



7.5 
2.5 

5.8 
8.9 
4.8 
5.1 
1.2 

5.0 
4.5 
3.7 
2.4 
4.9 

2.4 
2.4 
4.0 
3.0 
3.2 

4.5 
3.5 
3.1 
5.8 
6.4 

4.6 
6.2 
7.5 
6.2 
6.4 

5.7 
7.3 
7.5 
7.8 

5.5 
7.2 
7.7 
8.4 
7.5 
8.0 

7.9 
7.1 
7.7 
8.3 
7.6 
7.4 

7.3 
6.1 
7.8 
8.3 
7.5 
7.9 

8.1 
8.5 
8.0 
8.1 
8.4 
8.7 



1967 dollars 



1 Also includes other private industry groups shown in Table B-34. 

3 Earnings in current dollars divided by the consumer price index (revised index for urban wage earners and clerical 
workers used beginning 1978). 
3 Based on unadjusted data. 

Note.— See Note, Table B-34. 

Source: Department of Labor, Bureau of Labor Statistics. 

225 



Table B-37. — Productivity and related data, private business economy, 1947-78 
(1967=100; quarterly data seasonally adjusted] 





Output> 


Hours of all 
persons 3 


Output per 

hour of all 

persons 


Compensation 
per hour' 


Unit labor 
cost 


Implicit price 
deflator 


Year or quarter 


Private 
busi- 
ness 

sector. 


Non- 
farm 
busi- 
ness 
sector 


Private 
busi- 
ness 

sector 


Non- 
farm 
busi- 
ness 
sector 


Private 
busi- 
ness 
sector 


Non- 
farm 
busi- 
ness 
sector 


Private 
busi- 
ness 
sector 


Non- 
farm 
busi- 
ness 
sector 


Private 
busi- 
ness 
sector 


Non- 
farm 
busi- 
ness 
sector 


Private 
busi- 
ness 
sector 


Non- 
farm 
busi- 
ness 
sector 


1947 


48.6 
50.9 
49.9 

54.5 
57.7 
59.2 
61.9 
60.8 

65.7 
67.5 
68.4 
66.9 
71.8 

73.1 
74.2 
78.8 
82.2 
86.8 

92.9 
98.0 
100.0 
105.1 
108.3 

107.3 
110.3 
117.6 
124.5 
121.5 

118.8 
126.5 
133.2 
139.0 

125.0 
126.2 
127.1 
127.6 

130.5 
132.5 
134.2 
135.5 

135.3 
138.7 
139.7 
142.2 


47.5 
49.6 
48.7 

53.3 
56.7 
58.5 
60.8 
59.6 

64.6 
66.5 
67.5 
65.9 
71.1 

72.2 
73.3 
78.1 
81.6 
86.4 

92.6 
98.1 
100.0 
105.4 
108.6 

107.4 
110.2 
117.8 
125.0 
121.9 

118.8 
127.0 
133.6 
139.9 

125.2 
126.9 
127.7 
128.1 

131.0 
133.0 
134.6 
135.8 

136.1 
139.8 
140.6 
143.0 


90.9 
91.5 
88.5 

89.5 
92.1 
92.2 
93.2 
90.1 

93.5 
94.9 
93.5 
89.3 
92.8 

93.0 
91.5 
93.0 
93.5 
94.9 

97.8 
100.1 
100.0 
101.8 
104.6 

103.0 
102.4 
105.5 
109.6 
110.3 

105.6 
108.7 
112.6 
117.1 

108.3 
108.7 
108.5 
108.9 

110.7 
112.9 
112.9 
113.9 

115.0 
117.6 
117.4 
118.9 


79.1 
80.4 
77.3 

79.8 
83.5 
84.3 
86.4 
83.5 

87.0 
89.1 
88.7 
85.0 
88.8 

89.3 
88.3 
90.2 
91.2 
93.2 

96.6 
99.8 
100.0 
102.1 
105.5 

104.2 
103.8 
107.0 
111.6 
112.4 

107.5 
111.0 
115.4 
120.1 

110.8 
110.9 
110.9 
111.5 

113.3 
115.5 
115.8 
116.7 

117.8 
120.6 
120.5 
121.9 


53.5 
55.6 
56.5 

60.9 
62.7 
64.2 
66.4 
67.5 

70.3 
71.1 
73.1 
74.9 
77.4 

78.6 
81.1 
84.7 
88.0 
91.5 

95.0 
98.0 
100.0 
103.3 
103.5 

104.2 
107.8 
111.4 
113.6 
110.1 

112.4 
116.4 
118.2 
118.7 

115.4 
116.1 
117.1 
117.2 

117.9 
117.4 
118.9 
119.0 

117.6 
118.0 
119.0 
119.6 


60.0 
61.6 
63.0 

66.8 
68.0 
69.3 
70.4 
71.4 

74.2 
74.6 
76.1 
77.5 
80.0 

80.8 
83.0 
86.6 
89.5 
92.7 

95.9 
98.3 
100.0 
103.2 
102.9 

103.1 
106.3 
110.1 
112.0 
108.5 

110.5 
114.4 
115.8 
116.5 

113.0 
114.4 
115.2 
114.9 

115.6 
115.2 
116.2 
116.4 

115.5 
116.0 
116.6 
117.3 


36.0 
39.0 
39.6 

42.4 
46.6 
49.5 
52.8 
54.4 

55.8 
59.4 
63.3 
66.1 
68.9 

71.9 
74.6 
78.1 
81.0 
85.2 

88.6 
94.9 
100.0 
107.6 
114.9 

123.1 
131.4 
139.7 
151.1 
164.8 

181.2 
197.0 
213.0 
232.9 

190.9 
194.8 
199.3 
203.6 

207.5 
210.5 
215.3 
218.8 

225.2 
229.6 
235.4 
240.3 


38.4 
41.6 
42.9 

45.4 
49.3 
52.1 
55.0 
56.7 

53.7 
62.3 
65.8 
68.3 
71.0 

74.1 

76.6 
79.7 
82.5 
86.3 

89.3 
94.8 
100.0 
107.3 
114.1 

121.7 
129.9 
138.3 
149.1 
162.7 

178.8 
193.7 
209.3 
228.9 

187.6 
191.7 
195.8 
199.9 

203.9 
207.1 
211.2 
215.1 

221.4 
225.8 
231.0 
236.1 


67.2 

70.2 
70.2 

69.6 
74.3 
77.2 
79.4 
80.6 

79.4 
83.6 
86.6 
88.2 
89.1 

91.4 
92.1 
92.1 
92.0 
93.2 

93.3 
96.8 
100.0 
104.1 
111.0 

118.1 
122.0 
125.3 
133.1 
149.7 

161.2 
169.3 
180.2 
196.3 

165.4 
167.7 
170.1 
173.8 

176.0 
179.3 
181.1 
183.9 

191.4 
194.6 
197.8 
200.9 


63.9 
67.6 
68.1 

67.9 
72.6 
75.1 
78.1 
79.4 

79.1 
83.4 
86.5 
88.2 
88.7 

91.7 
92.3 
92.0 
92.1 
93.1 

93.2 
96.4 
100.0 
104.0 
110.9 

118.1 
122.3 
125.6 
133.1 
150.0 

161.8 
169.4 
180.8 
196.6 

166.0 
167.5 
170.1 
173.9 

176.4 
179.8 
181.7 
184.8 

191.7 
194.7 
198.1 
201.3 


65.2 
70.7 
69.9 

70.9 
76.0 
77.5 
77.9 
78.6 

79.8 
82.2 
84.9 
86.4 
88.2 

89.4 
89.9 
90.7 
91.5 
92.7 

94.2 
97.2 
100.0 
103.9 
108.8 

113.9 
118.9 
123.1 
130.2 
143.0 

157.4 
165.4 
174.9 
187.9 

162.4 
164.5 
166.3 
168.5 

170.6 
174.0 
176.3 
178.4 

181.3 
186.6 
189.9 
193.4 


62.4 


1948 


67.6 


1949 


68.1 


1950 


69.2 


1951 


73.7 


1952 


75.2 


1953 


76.8 


1954 


77.8 


1955 


79.5 


1956 


82.0 


1957 


84.7 


1958 


86.0 


1959 


88.0 


1960 


89.3 


1961 


89.8 


1962 


90.6 


1963 


91.5 


1964 


92.9 


1965.. 


94.1 


1966 


96.8 


1967... 


100.0 


1968 


104.0 


1969 


108! 6 


1970 


114.0 


1971 


119.1 


1972 


122.8 


1973 


127.9 


1974 . 


141.3 


1975 


156.3 


1976 


164.8 


1977 


174.6 


1978* 


186.8 


1976:1 

II 

Ill 

IV 

1977: 1 

II 

III 

IV 

1978: 1 

II 

Ill 

IV p 


161.8 
163.4 
165.7 
168.2 

170.0 
173.6 
176.4 
178.1 

180.6 
185.3 
188.9 
192.2 



■ Output refers to gross domestic product originating in the sector in 1972 dollars. 

7 Hours of all persons engaged in the sector, including hours of proprietors and unpaid family workers. Estimates based 
primarily on establishment data. 

3 Wages and salaries of employees plus employers' contributiot s for social insurance and private benefit plans. Also 
i ncludes an estimate of wages, salaries, and supplemental payments for the self-employed. 

* Current dollar gross domestic product divided by constant dollar gross domestic product. 

Source: Department of Labor, Bureau of Labor Statistics. 



226 



I able c- jo. — L,nanges in productivity ana reiatea aata, private oustness economy, 1948-78 
[Percent change from preceding period; quarterly data at seasonally adjusted annual rates] 





Output" 


Hours of 
all persons' 


Output per hour 
of all persons 


Compensation 
per hour' 


Unit labor 
cost 


Implicit price 
deflator* 


Year or quarter 


Private 
busi- 
ness 

sector 


Non- 
tarm 
busi- 
ness 
sector 


Private 
busi- 
ness 

sector 


Non- 
farm 
busi- 
ness 
sector 


Private 
busi- 
ness 

sector 


Non- 
farm 
busi- 
ness 
sector 


Private 
busi- 
ness 

sector 


Non- 
farm 
busi- 
ness 
sector 


Private 
busi- 
ness 
sector 


Non- 
farm 
busi- 
ness 
sector 


Private 
busi- 
ness 

sector 


Non- 
farm 
busi- 
ness 
sector 


1948 

1949.. 

1950 


4.6 
-1.8 

9.2 
5.9 
2.5 
4.6 
-1.7 

8.0 
2.8 
1.3 
-2.2 
7.3 

1.8 
1.5 

6.2 
4.4 

5.6 

7.0 
5.5 
2.0 
5.1 
3.0 

-.9 
2.8 
6.6 
5.9 
-2.4 

-2.3 
6.5 
5.3 

4.4 

11.2 
4.0 
2.8 

1.6 

9.3 
6.5 
5.0 
4.0 

-.6 
10.5 
3.0 
7.1 


4.4 
-1.8 

9.4 
6.5 
3.0 

4.1 
-2.0 

8.2 
3.0 
1.5 
-2.5 
7.9 

1.6 
1.5 
6.5 
4.5 
5.9 

7.1 
6.0 
1.9 
5.4 
3.0 

-1.1 
2.6 
6.9 
6.0 

-2.5 

-2.5 
6.9 
5.2 
4.7 

11.5 
5.7 
2.5 
1.2 

9.4 
6.2 
5.0 
3.5 

.7 

11.6 

2.1 

7.1 


0.7 
-3.3 

1.2 

2.9 

.1 

1.0 

-3.3 

3.8 

1.5 

-1.5 

-4.5 

3.9 

.2 

-1.6 
1.6 
0.6 
1.5 

3.1 
2.3 
-.1 
1.8 
2.8 

-1.5 

-.6 

3.1 

3.9 

.7 

-4.3 
2.9 
3.7 
4.0 

6.2 
1.4 
-.8 
1.6 

6.6 
8.3 
-.1 
3.7 

4.0 
9.2 
-.4 
5.0 


1.7 
-3.9 

3.2 
4.6 
1.0 
2.5 
-3.4 

4.1 
2.5 
-.5 
-4.1 
4.4 

.6 

-1.2 

2.1 

1.1 

2.3 

3.6 
3.3 
.2 
2.1 
3.3 

-1.2 

-.4 

3.2 

4.2 

.7 

-4.3 
3.3 
3.9 

4.1 

7.5 

.7 

-.2 

2.1 

6.8 
7.7 
1.3 
3.0 

3.9 
9.8 
-.2 

4.7 


3.8 
1.6 

7.9 
2.8 
2.4 
3.6 

1.6 

4.1 
1.3 
2.8 
2.5 
3.2 

1.6 
3.1 
4.5 
3.8 

4.0 

3.8 
3.2 
2.0 
3.3 
.2 

.7 

3.4 

3.4 

1.9 

-3.0 

2.1 

3.5 

1.6 

.4 

4.7 

2.6 

3.6 

.1 

2.5 

-1.7 

5.1 

.4 

-4.5 
1.2 
3.5 
2.1 


2.7 
2.2 

6.0 
1.8 
1.9 
1.5 
1.4 

4.0 
.5 
2.0 
1.8 
3.3 

1.0 
2.7 

4.3 
3.4 
3.6 

3.4 
2.6 
1.7 
3.2 
-.3 

.1 
3.1 
3.6 

1.7 
-3.1 

1.9 

3.5 

1.3 

.6 

3.7 
5.0 
2.7 
-.9 

2.4 

-1.4 

3.7 

.5 

-3.1 
1.7 
2.3 
2.3 


8.4 
1.7 

7.0 
9.8 
6.4 
6.5 
3.2 

2.5 
6.5 
6.5 
4.4 
4.3 

4.2 
3.9 
4.6 
3.7 
5.3 

4.0 
7.1 
5.4 
7.6 
6.8 

7.1 
6.7 
6.3 
8.2 

9.1 

9.9 
8.7 
8.1 
9.3 

9.0 
8.4 
9.6 
8.9 

7.9 
5.8 
9.5 
6.7 

12.1 
8.1 

10.4 
8.7 


8.5 
3.1 

5.7 
8.7 
5.5 
5.7 
3.1 

3.6 
6.0 
5.7 
3.8 
4.0 

4.4 
3.3 
4.0 
3.5 
4.6 

3.5 
6.1 
5.5 

7.3 
6.4 

6.6 
6.7 

6.5 
7.8 
9.1 

9.9 
8 4 
8.1 
9.4 

7.5 
9.0 
9.0 
8.5 

8.3 
6.5 
8.1 

7.6 

12.2 
8.2 
9.6 
9.1 


4,5 
.1 

-.9 
6.8 
3.9 
2.8 
1.5 

-1.5 
5.2 
3.6 
1.9 
1.0 

2.6 
.7 


-.1 
1.2 

.2 
3.8 
3.3 

4.1 
6.6 

6.4 
3.3 
2.8 
6.2 
12.5 

7.7 
5.0 
6.4 
8.9 

4.1 
5.7 
5.8 
8.8 

5.3 
7.6 
4.2 
6.3 

17.4 
6.8 
6.7 
6.5 


5.7 
.8 

-.3 
6.8 
3.5 
4.0 
1.6 

-.4 
5.5 
3.6 
2.0 
.7 

3.4 

.6 

-.3 

.1 

1.0 

.1 
3.5 
3.8 
4.0 
6.6 

6.5 
3.5 
2.7 
6.0 
12.6 

7.8 
4.7 
6.7 
8.8 

3.7 
3.8 
6.2 
9.5 

5.8 
8.0 
4.2 
7.1 

15.7 
6.4 
7.1 
6.7 


8.4 
-1.1 

1.5 

7.3 

1.9 

.6 

.9 

1.5 
3.0 
3.2 
1.9 
2.0 

1.4 
.6 
.9 
.9 

1.4 

1.6 
3.2 
2.9 
3.9 
4.7 

4.7 
4.4 
3.6 
5.8 
9.8 

10.1 
5.1 
5.7 
7.5 

3.2 
5.2 

4.4 
5.4 

5.2 
8.2 
5.2 
4.9 

6.7 
12.1 
7.3 
7.7 


8.3 

.8 

1.6 

6 5 


1951 


1952 


2.1 
2.1 
1.3 

2.1 
3.2 
3 3 


1953 


1954. .. 


1955 


1956 ... 


1957 


1958 


1.5 
2 4 


1959 


1960 


1 4 


1961 


.6 
g 


1962 


1963 


1.0 
1.5 

1.3 
2.9 
3.3 
4.0 
4.5 

4 9 


1964 


1965 

1966 .. 


1967 . 


1968 


1969 . 


1970 


1971 


4.5 
3.1 
4.1 
10 5 


1972... 


1973.... 


1974 


1975 


10 6 


1976 


5 4 


1977 


5 9 


1978 " 


7 


1976: 1 

II 

Ill 

IV 

1977: 1 

II 

Ill 

IV 

1978: 1 


4.9 
4.1 

5.8 

6.1 

4.4 
8.7 
6.5 
4.0 

5.8 


II 

Ill 

IV p 


10.8 
8.1 
7.1 



1 Output refers to gross domestic product originating in the sector in 1972 dollars. 

2 H ours of all persons engaged in the sector, including hours of proprietors and unpaid family workers. Estimates based 
pri marily on establishment data. 

1 Wages and salaries of employees plus employers' contributions for social insurance and private benefit plans. Also 
inc ludes an estimate of wages, salaries, and supplemental payments for Bra self-employed. 
* Current dollar gross domestic product divided by constant dollar gross domestic product 

Note.— Percent changes are based on original data and therefore may differ slightly from percent changes based on 
indexes in Table B-37. 

Source: Department of Labor, Bureau of Labor Statistics. 



227 



PRODUCTION AND BUSINESS ACTIVITY 

Table B-39. — Industrial production indexes, major industry divisions, 1929-78 
11967=100; monthly data seasonally adjusted] 



Year or month 


Total 
industrial 
production 


Manufacturing 


Mining 




Total 


Durable 


Nondurable 


Utilities 


1967 proportion 


100.00 


87.95 


51.98 


35.97 


6.36 


5.69 




1929 


21.6 
13.7 
21.7 

25.0 
31.6 
36.3 
44.0 
47.4 
40.7 
35.0 
39.4 
41.1 
38.8 

44.9 
48.7 
50.6 
54.8 
51.9 
58.5 
61.1 
61.9 
57.9 
64.8 

66.2 
66.7 
72.2 
76.5 
81.7 
89.8 
97.8 
100.0 
106.3 
111.1 

107.8 
109.6 
119.7 
129.8 
129.3 
117.8 
129.8 
137.1 
145.1 

132.3 
133.2 
135.3 
136.1 
137.0 
137.8 

138.7 
138.1 
138.5 
138.9 
139.3 
139.7 

138.8 
139.2 
140.9 
143.2 
143.9 
144.9 

146.1 
147.1 
147.8 
148.6 
149.5 
150.4 


22.8 
14.0 
21.5 

25.4 
32.4 
37.8 
47.0 
50.9 
42.6 
35.3 
39.4 
40.9 
38.7 

45.0 
48.6 
50.6 
55.2 
51.5 
58.2 
60.5 
61.2 
57.0 
64.2 

65.4 
65.6 
71.5 
75.8 
81.0 
89.7 
97.9 
100.0 
106.4 
111.0 

106.4 
108.2 
118.9 
129.8 
129.4 
116.3 
129.5 
137.1 
145.5 

131.6 
132.6 
135.1 
135.8 
137.1 
137.8 

138.5 
138.6 
139.0 
139.4 
139.9 
140.5 

138.7 
139.4 
141.4 
143.5 
144.3 
145.5 

146.7 
147.6 
148.7 
149.4 
150.3 
151.2 


22.5 
9.1 
17.7 

23.5 
31.4 
39.9 
54.2 
59.9 
45.2 
31.6 
37.7 
39.3 
35.7 

43.5 
48.9 
51.9 
58.7 
51.8 
59.2 
61.1 
61.6 
53.9 
61.9 

62.9 
61.8 
68.6 
73.1 
78.3 
89.0 
98.9 
100.0 
106.5 
110.6 

102.3 
102.4 
113.7 
127.1 
125.7 
109.3 
121.7 
129.5 
139.2 

123.4 
124.0 
126.8 
128.0 
129.3 
130.5 

131.6 
131.3 
131.7 
132.4 
132.7 
133.4 

131.1 
131.5 
134.4 
136.9 
137.6 
139.0 

141.1 
142.2 
142.8 
143.9 
145.0 
145.9 


23.2 
19.9 
26.1 

27.5 
33.3 
34.6 
37.1 
38.6 
38.5 
39.7 
41.3 
42.7 
42.0 

46.7 
48.3 
49.2 
51.2 
51.6 
57.2 
60.1 
61.1 
61.6 
67.7 

69.3 
71.5 
75.8 
80.0 
85.2 
90.9 
96.7 
100.0 
106.2 
111.5 

112.3 
116.6 
126.5 
133.8 
134.6 
126.4 
140.9 
148.1 
154.7 

143.4 
145.3 
147.0 
147.0 
148.5 
148.4 

148.6 
149.4 
149.5 
149.6 
150.1 
150.9 

149.8 
150.6 
151.4 
153.2 
154.0 
154.9 

155.0 
155.6 
157.1 
157.5 
158.1 
158.9 


43.1 
30.6 
42.1 

46.8 
49.7 
51.3 
52.5 
56.2 
55.1 
54.2 
61.3 
64.4 
57.1 

63.8 
70.0 
69.4 
71.2 
69.9 
77.9 
82.0 
82.1 
75.3 
78.7 

80.3 
80.8 
83.1 
86.4 
89.9 
93.2 
98.2 
100.0 
104.2 
108.3 

112.2 
109.8 
113.1 
114.7 
115.3 
112.8 
114.2 
117.8 
124.2 

112.8 
116.3 
120.6 
119.2 
119.5 
122.8 

119.8 
115.4 
118.0 
119.6 
118.8 
113.4 

115.0 
114.4 
119.3 
127.2 
126.7 
128.0 

127.1 
126.0 
124.1 
127.7 
127.9 
128.0 


7.4 
6.7 
10.7 

11.8 
13 3 


1933 


1939 


1940 


1941 


1942 


14 9 


1943 


16 5 


1944 


17 5 


1945 


17 8 


1946 


18 6 


1947 


20.1 
22 4 


1948 


1949 


23 9 


1950 


27 2 


1951 


31 


1952 


33 7 


1953 


36 5 


1954 


39 3 


1955 


43.9 


1956 


48 2 


1957 


51.5 


1958 


53 9 


1959 


59.3 


1960 


63.4 


1961 


67.0 


1962 


72.0 


1963 


77.0 


1964 


83.6 


1965 


88.7 


1966 


95.5 


1967 


100.0 


1968 


108.4 


1969 


117.3 


1970 


124.5 


1971 


130.5 


1972 


139.4 


1973 


145.4 


1974 


143.7 


1975 


146.0 


1976 


151.0 


1977 


156.5 


1978" 


161.0 


1977: Jan 


163.8 


Feb 


160.3 


Mar 


154.8 


Apr... 


154. 


May 


156.7 


June 


156.8 


July 


161.4 


Aug 


155.7 


Sept 


154.1 


Oct 


154.0 


Nov 


154.2 


Dec 


156.7 


1978: Jan.. 

Feb 


162.3 
163.5 


Mar 


159.5 


Apr 

May 


156.0 
157.0 


June 


158.6 


July 


159.9 


Aug 


160.8 


Sept 


162.3 


Oct 


162.4 


Nov». 


162.6 


Dec* 


163.3 







1 Preliminary estimates by Council of Economic Advisers. 

Source: Board of Governors of the Federal Reserve System, except as noted. 



228 



Table B-40. — Industrial production indexes, market groupings, 1947-78 
(1967=100; monthly data seasonally adjusted] 



Total 
indus- 
trial 
pro- 
duc- 
tion 



100. 00 



39.4 
41.1 
38.8 

44.9 
48.7 
50.6 
54.8 
51.9 

58.5 
61.1 
61.9 
57.9 
64.8 

66.2 
66.7 
72.2 
76.5 
81.7 

89.8 
97.8 
100.0 
106.3 
111.1 

107.8 
109.6 
119.7 
129.8 
129.3 

117.8 
129.8 
137.1 

132.3 
133.2 
135.3 
136.1 
137.0 
137.8 

138.7 
138.1 
138.5 
138.9 
139.3 
139.7 

138.8 
139.2 
140.9 
143.2 
143.9 
144.9 

146.1 
147.1 
147.8 
148.6 
149.5 
150.4 



Final products 



Total 



47.82 



38.6 
40.0 
38.8 

43.7 
47.2 
50.7 
54.1 
51.3 

55.4 
58.6 
60.3 
57.6 
63.2 

65.3 
65.8 
71.4 
75.5 
79.7 

87.6 
95.9 
100.0 
106.2 
109.6 

105.3 
106.3 
115.7 
124.4 
125.1 

118.2 
127.2 
134.9 

130.8 
131.6 
133.3 
134.1 
134.7 
135.4 

136.8 
136.3 
136.8 
136.5 
137.0 
137.6 

134.9 
136.4 
138.9 
140.5 
140.5 
141.1 

142.2 
143.3 
143.7 
143.9 
144.8 
145.6 



Consumer goods ' 



Total 



27.68 



42.4 
43.7 
43.4 

49.6 
49.1 
50.2 
53.2 
52.9 

59.0 
61.2 
62.6 
62.1 
68.1 

70.7 
72.2 
77.1 
81.3 
85.9 

92.6 
97.3 
100.0 
105.9 
109.8 

109.0 
114.7 
124.4 
131.5 
128.9 

124.0 
136.2 
143.4 

139.9 
140.5 
142.9 
142.9 
143.1 
143.8 

145.4 
144.7 
144.9 
144.9 
145.2 
145.8 

141.8 
143.8 
145.9 
147.5 
147.0 
147.0 

147.7 
148.4 
149.0 
149.1 
149.8 
150.5 



Auto- 
motive 
prod- 
ucts 



2.83 



45.3 
47.4 
47.0 

59.1 
52.3 
47.1 
59.5 
55.4 

73.6 
60.6 
63.5 
50.5 
63.3 

72.5 
66.1 
80.1 
87.7 
91.9 

113.3 
112.8 
100.0 
119.4 
118.1 

98.8 
124.4 
141.4 
153.0 
132.8 

125.8 
154.8 
174.2 

164.2 
161.7 
178.3 
173.9 
172.8 
179.8 

184.8 
177.2 
177.0 
179.4 
173.6 
172.4 

157.5 
162.8 
175.8 
184.3 
180.0 
179.9 

182.2 
182.1 
178.3 
186.2 
189.6 
186.3 



Home 
goods 



5.06 



37.5 
39.1 
36.2 

49.9 
43.0 
43.0 
48.6 
44.9 

53.0 
55.7 
54.5 
51.4 
59.0 

59.4 
61.3 
66.5 
71.8 
78.4 

88.9 
97.9 
100.0 
106.4 
113.2 

110.2 
115.6 
129.5 
142.5 
136.8 

118.8 
133.9 
141.3 

134.8 
137.3 
137.9 
138.8 
140.6 
142.3 

142.9 
142.1 
143.6 
144.2 
145.0 
146.6 

140.3 
144.6 
147.2 
149.2 
148.9 
149.7 

148.9 
150.0 
150.2 
148.5 
147.6 
149.6 



Equipment 2 



Total 



20.14 



30.6 
32.2 
28.7 

31.1 

43.3 
51.9 
56.3 
49.3 

50.4 
55.3 
57.5 
51.5 
56.5 

58.1 
57.3 
63.7 
67.5 
71.4 

80.7 
94.0 
100.0 
106.5 
109.3 

100.1 
94.7 
103.8 
114.5 
120.0 

110.2 
114.6 
123.2 

118.4 
119.2 
120.0 
122 1 
123.2 
124.1 

124.8 
124.9 
125.6 
125.0 
125.8 
126.2 

125.4 
126.2 
129.1 
130.8 
131.6 
133.0 

134.7 
136.3 
136.4 
136.9 
137.7 
138.8 



Busi- 
ness 



12.63 



38.0 
39.5 
34.5 

37.0 
45.2 
51.2 
53.3 
46.8 

50.8 
58.8 
61.1 
51.5 
57.9 

59.4 
57.7 
62.7 
65.8 
73.7 

84.4 
97.7 
100.0 
105.5 
112.5 

107.0 
104.1 
118.0 
134.2 
142.4 

128.2 
136.3 
149.2 

142.3 
143.5 
144.8 
147.1 
148.9 
150.1 

151.2 
151.1 
152.1 
152.6 
153.5 
154.0 

152.6 
154.2 
157.4 
159.3 
160.2 
161.8 

163.8 
165.4 
165.8 
166.9 
167.9 
169.3 



Inter- 
mediate 
prod- 
ucts 



12.89 



41.9 
44.3 
42.0 

48.8 
51.3 
50.9 
54.5 
54.3 

61.7 
64.4 
64.4 
63.0 
69.5 

70.0 
71.4 
75.7 
79.9 
85.2 

90.6 
96.2 
100.0 
106.3 
112.9 

112.9 
116.7 
126.5 
137.2 
135.3 

123.1 
137.2 
145.1 

142.2 
141.6 
141.8 
142.3 
143.5 
144.7 



Materials' 



Total 



39.29 



39.5 
41.2 
37.6 

45.0 
49.8 
50.5 
56.1 
51.8 

61.3 
62.8 
62.8 
56.5 
65.2 

66.1 
66.2 
72.1 
76.7 
82.9 

92.4 
100.7 
100.0 
106.5 
112.5 

109.2 
111.3 
122.3 
133.9 
132.4 

115.5 
130.6 
136.9 

131.1 
132.7 
135.5 
136.5 
137.8 
138.7 



Dura- 
ble 
goods 



20.35 



146.3 


138.9 


146.1 


137.6 


146.5 


137.9 


147.8 


138.9 


148.4 


139.0 


150.4 


138.8 


151.6 


139.2 


151.4 


138.6 


151.4 


139.9 


152.1 


143.7 


152.6 


145.1 


154.7 


146.4 


155.6 


147.9 


156.4 


148.6 


157.0 


149.7 


158.1 


151.3 


159.2 


152.2 


160.5 


152.9 

1 



38.3 
39.4 
35.3 

44.4 
50.5 
51.6 
60.3 
52.0 

63.7 
63.9 
63.8 
53.7 
64.0 

64.8 
63.3 
70.4 
75.1 
81.9 

93.8 
103.3 
100.0 
106.2 
112.1 

103.8 
104.9 
117.7 
134.6 
132.7 

109.1 
126.8 
134.5 

127.4 
128.4 
131.9 
133.8 
135.2 
136.4 

136.8 
135.4 
135.7 
137.1 
137.2 
138.7 

138.2 
137.0 
138.6 
142.7 
143.9 
145.4 

148.7 
150.4 
152.1 
153.7 
154.6 
155.8 



1 Also includes clothing and consumer staples, not shown separately. 
1 Also includes defense and space equipment, not shown separately. 
1 Also includes energy materials, not shown separately. 

Source: Board of Governors of the Federal Reserve System. 

229 



Table B-41. — Industrial production indexes, selected manufactures, 1947-78 
11967=100; monthly data seasonally adjusted] 





Durable manufactures 


Nondurable manufactures 


Year 
or 


Primary metals 


Fabri- 
cated 
metal 
prod- 
ucts 


Non- 
elec- 
trical 
ma- 
chin- 
ery 


Elec- 
trical 
ma- 
chin- 
ery 


Transportation 
equipment 


Lum- 
ber 
and 
prod- 
ucts 


Ap- 
parel 
prod- 
ucts 


Print- 
ing 
and 
pub- 
lishing 


Chem- 
icals 
and 

prod- 
ucts 




month 


Total 


Iron 
and 
steel 


Total 


Motor 
ve- 
hicles 
and 
parts 


Foods 


1967 proportion. 


6.57 


4.21 


5.93 


9.15 


8.05 


9.27 


4.50 


1.64 


3.31 


4.72 


7.74 


8.75 


1947 


63.3 
65.8 
55.4 

69.7 
75.8 
69.2 
78.5 
63.5 

82.5 
82.0 
78.5 
62.3 
72.7 

72.4 
71.1 
76.3 
82.3 
92.8 

102.1 
108.4 
100.0 
104.3 
113.8 

106.6 
100.2 
112.1 
126.7 
123.1 

96.4 
108.9 
110.2 

100.8 
100.2 
108.3 
112.2 
117.1 
114.7 

114.4 
112.5 
109.0 
113.5 
111.2 
111.0 

107.4 
106.2 
106.1 
114.3 
115.5 
117.5 

123.0 
126.0 
127.9 
128.4 
128.9 
129.3 


70.1 

93.2 
91.5 
88.2 
66.5 
76.5 

77.7 
74.2 
77.3 
84.3 
95.9 

105.2 
108.4 
100.0 
103.2 
112.6 

104.7 
96.1 
107.1 
122.3 
119.8 

95.8 
104.9 
103.4 

89.7 
91.3 
97.9 
103.9 
111.0 
109.2 

110.9 
110.6 
104.6 
107.7 
104.3 
103.8 

99.5 
96.3 
96.4 
109.0 
110.5 
114.5 

119.0 
120.9 
123.2 
123.8 
123.9 


49.9 
50.8 
45.8 

56.1 
59.9 
58.5 
66.0 
59.4 

67.8 
68.8 
70.6 
63.3 
71.0 

71.1 

69.4 
75.4 
77.8 
82.6 

90.8 
97.2 
100.0 
105.6 
107.9 

102.4 
103.5 
112.1 
124.7 
124.2 

109.9 
123.3 
130.9 

125.7 
125.8 
127.5 
127.6 
128.2 
130.8 

132.0 
134.0 
133.6 
133.8 
135.8 
136.4 

136.9 
136.9 
138.1 
139.5 
140.4 
142.3 

144.0 
145.8 
146.3 
146.3 
146.8 
147.9 


39.0 
39.2 
33.4 

37.5 
47.7 
51.9 
54.0 
46.1 

50.6 
58.0 
57.9 
48.6 
56.7 

56.9 
55.4 
62.1 
66.3 
75.6 

85.0 
98.8 
100.0 
101.8 
109.3 

104.4 
100.2 
116.0 
133.7 
140.1 

125.1 
135.0 
144.8 

139.9 
139.8 
139.8 
142.9 
142.6 
144.0 

145.7 
145.2 
147.4 
148.9 
149.7 
151.7 

150.1 
150.1 
151.5 
152.2 
152.9 
154.6 

156.1 
157.3 
158.7 
159.8 
160.7 
162.2 


22.2 
23.0 
21.6 

29.6 
29.8 
34.0 
39.0 
34.7 

39.9 
43.1 
42.8 
39.2 
47.6 

51.6 
54.8 
62.9 
64.7 
68.4 

81.7 
97.9 
100.0 
105.5 
111.9 

108.1 
107.7 
122.2 
143.1 
143.8 

116.5 
131.6 
141.9 

134.0 
137.6 
137.6 
139.6 
141.8 
142.6 

143.6 
143.9 
144.6 
144.2 
146.0 
147.3 

144.0 
146.4 
149.5 
152.3 
152.9 
154.1 

157.9 
156.9 
158.3 
157.9 
159.2 
160.9 


31.8 
34.8 
34.9 

41.8 
46.6 
54.2 
68.0 
59.2 

68.0 
66.0 
70.7 
55.8 
63.2 

65.4 
61.5 
71.1 
78.0 
80.0 

95.1 
102.0 
100.0 
111.1 
108.4 

89.5 
97.9 
108.2 
118.3 
108.7 

97.4 
110.6 
121.1 

113.5 
113.4 
120.5 
119.8 
120.3 
123.7 

125.6 
124.3 
125.5 
124.3 
122.0 
122.2 

116.2 
118.4 
126.5 
130.5 
130.1 
130.4 

132.1 
133.4 
132.8 
136.9 
139.3 
138.6 


60.5 

81.2 
65.8 
69.0 
51.0 
66.2 

74.7 
65.5 
79.8 
88.3 
90.7 

115.9 
113.9 
100.0 
120.3 
116.5 

92.3 
118.6 
135.8 
148.8 
128.2 

111.1 
140.7 
159.7 

145.5 
145.4 
161.2 
158.1 
157.7 
163.2 

166.2 
164.4 
165.6 
168.4 
163.0 
161.8 

146.6 
153.1 
165.1 
171.7 
168.3 
167.7 

169.7 
171.0 
168.9 
177.1 
181.3 
178.5 


58.9 
61.3 
54.1 

65.7 
65.5 
64.7 
68.4 
68.0 

75.9 
75.0 
68.8 
69.9 
79.3 

74.7 
78.2 
82.5 
86.3 
92.7 

96.3 
100.0 
100.0 
105.5 
107.9 

105.6 
113.8 
120.8 
126.0 
116.2 

107.6 
125.1 
133.4 

132.7 
132.2 
132.1 
130.6 
133.0 
132.4 

132.9 
131.8 
137.1 
135.7 
137.5 
138.1 

138.5 
135.5 
136.5 
136.9 
136.5 
138.7 

138.1 
136.9 
139.2 
140.2 
141.6 


57.8 
60.3 
59.7 

64.3 
63.1 
66.3 
67.2 
66.4 

73.3 
75.0 
74.9 
72.8 
80.1 

81.7 
82.2 
85.5 
89.1 
92.2 

97.4 
99.9 
100.0 
102.9 
106.7 

101.4 
104.7 
109.4 
117.3 
114.3 

107.6 
122.2 
124.2 

123.0 
124.4 
122.2 
121.4 
123.5 
122.1 

121.1 
124.1 
127.7 
129.0 
125.1 
125.8 

118.6 
121.1 
122.8 
126.1 
125.8 
126.8 

124.5 
127.2 
130.9 
130.6 


43.3 
45.4 
46.6 

48.9 
49.7 
49.7 
52.0 
54.1 

59.5 
63.2 
65.4 
63.9 
68.2 

71.0 
71.3 
73.9 
77.8 
82.6 

87.9 
94.6 
100.0 
103.2 
107.4 

107.0 
107.1 
112.7 
118.2 
118.2 

113.3 
120.6 
124.7 

124.7 
122.4 
124.8 
123.4 
124.4 
124.1 

124.9 
125.0 
124.2 
125.7 
126.2 
127.5 

129.9 
128.3 
129.1 
128.6 
128.2 
128.7 

130.3 
129.5 
131.0 
130.3 
131.9 
132.9 


19.7 
21.3 
21.0 

26.2 
29.7 
31.1 
33.6 
34.1 

39.8 
42.7 
45.2 
46.6 
54.3 

56.4 
59.2 
65.7 
71.8 
78.8 

87.8 
95.7 
100.0 
109.5 
118.4 

120.4 
125.9 
143.6 
154.5 
159.4 

147.2 
169.3 
180.7 

172.2 
174.9 
180.0 
180.6 
182.8 
183.5 

182.6 
182.6 
181.3 
182.3 
183.1 
183.0 

184.4 
183.7 
185.2 
185.5 
188.1 
191.1 

192.3 
192.2 
194.2 
195.8 

196.8 


55.8 


1948 


55.2 


1949 


55 9 


1950 


57.9 


1951 


59.0 


1952 


60.2 


1953 


61.4 


1954 


62.7 


1955 


66 3 


1956 


70.1 


1957... 


71.1 


1958 


72.9 


1959 


76.5 


1960 


78.6 


1961 


80.9 


1962 


83.4 


1963 


86.4 


1964 


90.4 


1965 


92.4 


1966 


96.0 


1967 


100.0 


1968 


102.6 


1969 


106.1 


1970 - 

1971 


108.9 
112.8 


1972 


116.8 


1973 


120.9 


1974 


124.0 


1975 


123.4 


1976 


132.3 


1977 


137.9 


1977: Jan 

Feb 

Mar 

Apr 

May 

June 

July 

Aug 

Sept 

Oct 

Nov 

Dec 

1978: Jan 

Feb 

Mar 

Apr 

May 
June 

July 

Aug 

Sept 

Oct 

Novp 

Dec* 


134.2 
136.4 
138.7 
138.0 
138.3 
136.9 

138.3 
139.3 
138.3 
137.3 
139.4 
140.4 

139. 3 
140.8 
141.1 
143.1 
142.8 
141.8 

142.9 
144.0 
144.4 
143.5 
144.1 













Source: Board of Governors of the Federal Reserve System. 



230 



Table B-42. — Capacity utilization rate in manufacturing, 1948-78 
|Percent; quarterly data seasonally adjusted] 



Year or 
quarter 



1948. 
1949. 

1950. 
1951. 
1952. 
1953. 
1954. 

1955. 
1956. 
1957. 
1958. 
1959. 

1960. 
1961. 
1962. 
1963. 
1964. 

1965. 
1966. 
1967. 
1968. 
1969. 

1970. 
1971. 
1972. 
1973. 
1974. 



FRB series 



1975.. 
1976.. 
1977.. 
1978 »_ 



1973: I. 



II... 
III.. 
IV... 



1974: I. 



II... 
ML. 
IV... 

1975: I.... 
II... 
III.. 
IV... 

1976: I.... 
II... 
III.. 
IV.. 

1977: I.... 
II... 
III.. 
IV.. 

1978: 1. ... 
II... 
III.. 
IV». 



Total 
manu- 
fac- 
turing 



82.5 
74.2 

82.8 
85.8 
85.4 
89.2 
80.1 

87.0 
86.1 
83.6 
75.0 
81.6 

80.1 
77.3 
81.4 
83.5 
85.7 

89.5 
91.1 
86.9 
87.0 
86.2 

79.2 
78.0 
83.1 
87.5 
84.2 

73.6 
80.2 
82.4 
84.2 

87.1 

87.6 
87.8 
87.7 

85.7 
85.8 
85.5 
79.7 

70.9 
71.3 
75.3 
76.9 

79.1 

80.3 
80.8 
80.6 

81.2 

82.7 
83.0 
82.9 

82.1 
84.0 
85.0 
85.7 



Primary 
proc- 
essing 



87.3 
76.2 

88.5 
90.2 
84.9 
89.4 
80.6 

92.0 
89.4 
84.7 
75.4 
83.0 

79.8 
77.9 
81.5 
83.8 
87.8 

91.0 
91.4 
85.7 
87.6 
88.6 

82.8 
82.0 
88.0 
92.4 
87.7 

73.8 
82.2 
84.3 
86.6 

91.8 
92.1 
92.7 
93.0 

90.6 
90.1 
89.3 
80.7 

69.9 
70.4 
76.3 
78.6 

81.0 
82.5 
83.1 
82.2 

82.3 
85.1 
84.9 
84.6 

83.8 
86.3 
87.8 



Ad- 
vanced 
proc- 
essing 



80.0 
73.2 

79.8 
83.4 
85.9 
89.3 
80.0 

84.2 
84.4 
83.1 
74.9 
81.1 

80.5 
77.2 
81.6 
83.4 
84.6 

88.9 
91.1 
87.6 
86.8 
85.0 

77.3 
75.9 
80.5 
84.9 
82.2 

73.5 
79.1 
81.5 
82.9 

84.5 
85.2 
85.0 
85.0 

83.0 
83.3 
83.5 
79.1 

71.3 
71.9 
74.8 
75.9 

78.0 
79.1 
79.5 
79.7 

80.5 
81.4 
81.9 
82.0 

81.1 

82.7 
83.5 
84.2 



Commerce series' 



Total 
manu- 
fac- 
turing 



Dur- 
able 
goods 



Non- 
dur- 
able 
goods 



Pri- 

mary- 
proc- 
essed 
goods 



Ad- 
vanced 
proc- 
essed 
goods 



Wharton series ' 



Total 
manu- 
fac- 
turing 



88.9 
90.3 
88.4 
92.4 
82.9 

91.4 
90.8 
87.9 
77.5 
84.0 

82.1 
79.1 
82.5 
84.0 
86.8 

92.4 
96.6 
93.5 
95.0 
95.2 

87.8 
86.4 
91.8 
97.1 
92.9 

80.4 
87.4 
90.1 
92.8 

96.4 
97.1 
97.4 
97.4 

94.6 
94.7 
94.5 
87.8 

77.3 

77.9 
82.3 
83.9 

86.3 
87.8 
88.1 
87.6 

88.3 
90.2 
90.8 
91.0 

90.0 
92.5 
93.8 
94.8 



Dur- 
able 
goods 



83.8 
87.2 
86.0 
93.3 
79.5 

90.2 
89.0 
86.0 
70.8 
78.6 

77.0 
72.9 
77.7 
79.6 
82.8 

90.6 
96.0 
91.8 
93.7 
94.0 

84.2 

82.3 
88.9 
96.6 
91.9 

77.1 
84.7 
88.2 
92.0 

95.4 
96.4 
97.1 
97.4 

93.3 
93.5 
93.8 
86.9 

74.8 
74.7 
78.8 
80.0 

82.7 
85.1 
86.0 
85.0 

85.6 
88.3 
89.2 
89.6 

88.4 
91.5 
93.4 

94.6 



1 For description of the series, see "Federal Reserve Measures of Capacity and Capacity Utilization," February 1978. 

J Quarterly data are for last month in quarter. Annual data are averages of the four indexes, except for 1965 (December 
index) and 1966-67 (averages ot June and December indexes). For description of the series, see "Survey of Current Busi- 
ness," July 1974. 

3 Annual data are averages of quarterly indexes. For description of the series, see F. Gerard Adams and Robert Summers, 
"The Wharton Index of Capacity Utilization: A Ten Year Perspective," 1973 Proceedings of the Business and Economic 
Statistics Section, American Statistical Association. 

Sources: Board of Governors of the Federal Reserve System, Department of Commerce (Bureau of Economic Analysis), 
and Wharton School of Finance. 

231 



Table B-43. — New construction activity, 1929-78 
(Value put in place, billions of dollars; monthly data at seasonally adjusted annual rates) 





Total 
new 
con- 
struc- 
tion 


Private construction 


Public construction 


Year or month 


Total 


Residential 
buildings 1 


Nonresidential buildings and other 
construction ' 


Total 


Fed- 
eral 






Total ' 


New 
hous- 
ing 
units 


Total 


Com- 
mer- 
cial ' 


In- 
dus- 
trial 


Other* 


State 

and 

local » 


1929 


10.8 

2.9 

8.2 

8.7 
12.0 
14.1 
8.3 
5.3 

5.8 
14.3 

20.0 
26.1 
26.7 

33.6 

35.4 
36.8 
39.1 
41.4 

46.5 
47.6 
49.1 
50.0 
55.4 

54.7 

56.4 
60.2 
64.8 
67.7 

73.7 

76.4 
78.1 
87.1 
93.9 

94.9 
110.0 
124.1 
137.9 
138.5 

134.5 
148.8 
172.6 


8.3 
1.2 

4.4 

5.1 
6.2 
3.4 
2.0 
2.2 

3.4 
12.1 

16.7 
21.4 
20.5 

26.7 
26.2 
26.0 
27.9 
29.7 

34.8 
34.9 
35.1 
34.6 
39.3 

38.9 
39.3 
42.3 
45.5 
47.3 

51.7 
52.4 
52.5 
59.5 
66.0 

66.8 
80.1 
93.9 
105.4 
100.2 

93.7 

110.5 
134.7 


3.6 

.5 

2.7 

3.0 

3.5 

1.7 

.9 

.8 

1.3 
6.2 

9.9 
13.1 
12.4 

18.1 
15.9 
15.8 
16.6 
18.2 

21.9 

20.2 
19.0 
19.8 
24.3 

23.0 
23.1 
25.2 
27.9 
28.0 

27.9 
25.7 
25.6 
30.6 
33.2 

31.9 
43.3 
54.3 
59.7 
50.4 

46.5 
60.5 
81.0 


3.0 

.3 

2.3 

2.6 
3.0 

1.4 
.7 
.6 

.7 
4.8 

7.8 
10.5 
10.0 

15.6 
13.2 
12.9 
13.4 
14.9 

18.2 
16.1 
14.7 
15.4 
19.2 

17.3 
17.1 
19.4 
21.7 
21.8 

21.7 
19.4 
19.0 
24.0 
25.9 

24.3 
35.1 
44.9 
50.1 
40.6 

34.4 
47.3 
65.7 


4.7 

.8 

1.7 

2.1 
2.7 
1.7 

1.1 
1.4 

2.1 

5.8 

6.9 
8.2 
8.0 

8.6 
10.3 
10.2 
11.3 
11.5 

12.9 
14.7 
16.1 
14.8 
15.1 

15.9 
16.2 
17.2 
17.6 
19.3 

23.8 
26.7 
27.0 
28.9 
32.8 

34.9 
36.8 
39.6 
45.7 
49.8 

47.2 
49.9 
53.8 


1.1 

.1 

.3 

.3 
.4 
.2 
.0 
.1 

.2 
1.2 

1.0 
1.4 
1.2 

1.4 
1.5 
1.1 
1.8 
2.2 

3.2 
3.6 
3.6 
3.6 
3.9 

4.2 
4.7 
5.1 
5.0 
5.4 


0.9 

.2 

.3 

.4 
.8 
.3 
.2 
.2 

.6 
1.7 

1.7 
1.4 
1.0 

1.1 
2.1 
2.3 
2.2 

2.0 

2.4 
3.1 
3.6 
2.4 
2.1 

2.9 
2.8 
2.8 
2.9 
3.6 


2.6 

.5 

1.2 

1.3 
1.5 
1.2 
.9 
1.1 

1.3 
3.0 

4.2 
5.5 
5.9 

6.1 
6.7 
6.8 
7.3 
7.2 

7.3 
8.0 
9.0 
8.8 
9.0 

8.9 
8.7 
9.2 
9.7 
10.3 


2.5 

1.6 

3.8 

3.6 
5.8 
10.7 
6.3 
3.1 

2.4 
2.2 

3.3 
4.7 
6.3 

6.9 
9.3 
10.8 
11.2 
11.7 

11.7 
12.7 
14.1 
15.5 
16.1 

15.9 
17.1 
17.9 
19.4 
20.4 

22.1 
24.0 
25.5 
27.6 
28.0 

28.1 
29.9 
30.2 
32.5 
38.3 

40.9 
38.3 
37.8 


0.2 

.5 

.8 

1.2 
3.8 
9.3 
5.6 
2.5 

1.7 
.9 

.8 
1.2 
1.5 

1.6 
3.0 
4.2 
4.1 
3.4 

2.8 
2.7 
3.0 
3.4 
3.7 

3.6 
3.9 
3.9 
4.0 
3.9 

4.0 
4.0 
3.5 
3.4 
3.3 

3.3 
4.0 
4.4 
4.9 
5.3 

6.3 
6.8 

7.4 


2.3 


1933 


1 l 


1939 


3 1 


1940 


2.4 


1941 


2.0 


1942 . 


1.3 


1943. 

1944 


.7 
.6 


1945 


.7 


1946... 


1.4 


New series 
1947 


2.5 


1948 


3.5 


1949 


4.8 


1950 

1951. 

1952... .... 

1953 


5.2 
6.3 
6.6 
7.1 


1954 

1955 


8.3 
8.9 


1956 


10.0 


1957 


11.1 


1958 

1959 


12.1 
12.3 


1960 . 


12.2 


1961 


13.3 


1962... 


14.0 


1963 


15.4 


1964... 


16.5 


1965 . 


18.0 


1966 . 








20.0 


1967 








22.1 


1968 


7.8 
9.4 

9.8 
11.6 
13.5 
15.5 
15.9 

12.8 
12.8 
14.8 


6.0 
6.8 

6.5 
5.4 
4.7 
6.2 
7.9 

8.0 
7.2 
7.7 


15.1 
16.6 

18.6 
19.8 
21.5 
24.0 
25.9 

26.4 
30.0 
31.3 


24.2 


1969... 

1970... 

1971 

1972. 

1973 

1974... 


24.7 

24.8 
25.9 
25.8 
27.7 
33.0 


1975 


34.6 


1976 

1977 


31.6 
30.4 



See next page for continuation of table. 



232 



Table B-43. — New construction activity, 1929-78 — Continued 
[Value put in place, billions of dollars; monthly data at seasonally adjusted annual rates] 





Total 


Private construction 


Public construction 






Residential 


Nonresidential buildings and other 










new 




buildings! 




construction I 










Year or month 


con- 
struc- 
tion 


Total 














Total 


Fed- 
eral 


State 






New 
hous- 




Com- 


In- 




and 
local > 








Total* 


Total 


mer- 


dus- 


Other' 
















ing 
units 




cial* 


trial 










1977: Jan 


152.5 


118.6 


67.0 


52.5 


51.7 


12.8 


7.1 


31.8 


33.8 


7.3 


26.5 


Feb.... 


160.1 


123.6 


71.9 


58.1 


51.7 


12.8 


6.8 


32.0 


36.4 


7.6 


28.8 


Mar.... 


165.3 


128.1 


75.8 


61.5 


52.2 


13.4 


7.3 


31.5 


37.3 


7.4 


29.9 


Apr 

May.— 


169.3 


131.8 


79.0 


63.5 


52.8 


13.8 


7.6 


31.4 


37.5 


7.5 


30.0 


173.4 


134.6 


81.9 


65.9 


52.7 


14.0 


7.5 


31.2 


38.8 


7.4 


31.4 


June... 


175.8 


136.6 


82.6 


66.6 


53.9 


15.2 


7.6 


31.2 


39.2 


6.7 


32.5 


July 


176.4 


137.3 


82.9 


67.1 


54.4 


15.7 


7.7 


31.0 


39.1 


8.0 


31.1 


Aug 


176.4 


137.6 


82.9 


67.1 


54.7 


15.7 


8.1 


30.9 


38.8 


7.9 


30.9 


Sept 

Oct— 


177.8 


138.3 


83.0 


67.6 


55.4 


16.2 


8.1 


31.2 


39.4 


8.6 


30.8 


176.7 


139.2 


84.2 


69.3 


55.0 


15.9 


8.2 


30.9 


37.4 


6.6 


30.8 


Nov.... 


178.1 


140.6 


85.2 


70.7 


55.4 


15.9 


8.4 


31.1 


37.4 


7.3 


30.1 


Dec 


179.0 


142.3 


87.4 


72.8 


54.9 


14.9 


7.9 


32.1 


36.8 


7.3 


29.4 


1978: Jan 


171.4 


134.9 


79.4 


65.0 


55.6 


15.0 


7.4 


33.2 


36.4 


8.1 


28.3 


Feb.... 


177.6 


141.9 


85.3 


70.9 


56.6 


15.2 


7.7 


33.8 


35.7 


8.1 


27.6 


Mar..- 


185.4 


147.7 


88.1 


72.5 


59.6 


16.2 


9.2 


34.1 


37.7 


8.0 


29.6 


Apr 


195.0 


153.5 


92.2 


74.4 


61.3 


17.2 


9.2 


34.9 


41.5 


8.5 


33.1 


May- 


201.3 


156.2 


94.3 


75.1 


61.9 


18.5 


8.7 


34.6 


45.1 


7.8 


37.3 


June... 


206.3 


161.1 


95.4 


76.6 


65.7 


19.2 


11.3 


35.1 


45.2 


7.4 


37.8 


July 


210.2 


161.8 


95.9 


77.7 


65.9 


19.5 


11.2 


35.3 


48.4 


9.4 


39.0 


Aug 


208.7 


160.6 


95.0 


77.1 


65.6 


18.8 


12.0 


34.7 


48.2 


9.6 


38.5 


Sept... 
Oct— 


209.2 


161.3 


94.2 


76.8 


67.0 


18.9 


12.6 


35.4 


48.0 


9.8 


38.2 


209.9 


161.9 


93.6 


76.9 


68.3 


19.4 


12.6 


36.3 


47.9 


7.7 


40.2 


Nov »— 


212.8 


165.5 


95.8 


79.3 


69.7 


20.4 


12.7 


36.6 


47.3 


8.5 


38.8 



1 Beginning I960, farm residential buildings included in residential buildings; prior to 1960, included in nonresidential 
buildings and other construction. 

1 Total includes additions and alterations and nonhousekeeping units, not shown separately. 

1 Office buildings, warehouses, stores, restaurants, garages, etc. 

4 Religious, educational, hospital and institutional, miscellaneous nonresidential, farm (see also footnote 1), public 
utilities, and all other private. 

« Includes Federal grants-in-aid for State and local projects. 

Source: Department of Commerce (Bureau of the Census). 



233 



Table B-44. — New housing units started and authorized, 1959-78 
[Thousands of units] 



Year or month 



1959.. 

I960.. 
1961. 
1962.. 
1963. 
1964.. 

1965.. 
1966. 
1967.. 
1968.. 
1969.. 

1970.. 
1971.. 
1972.. 
1973.. 
1974.. 

1975.. 

1976.. 
1977.. 
1978 » 



1977: Jan.. 
Feb.. 

Mar- 
Apr. . 
May- 
June. 

July.. 

Aug.. 
Sept. 
Oct.. 
Nov.. 
Dec. 

1978: Jan.. 
Feb.. 
Mar- 
Apr.. 
May- 
June. 

July.. 
Aug.. 
Sept . 
Oct. . 
Nov f 
Dec * 



New housing units started 



Private and 
public ' 



Total 
(farm 
and 
non- 
farm) 



1, 553. 7 

1, 296. 1 
1,365.0 
1, 492. 5 
1,634.9 
1,561.0 

1, 509. 7 
1,195.8 
1,321.9 
1,545.4 

1, 499. 5 

1,469.0 

2, 084. 5 
2, 378. 5 
2, 057. 5 
1,352.5 

1,171.4 

1,547.6 
1,989.8 
2,021.5 



81.5 
112.7 
173.6 
182.4 
201.3 
197.8 

189.8 
194.2 
177.8 
193.2 
155.9 
129.4 



88.6 
101.3 
172.3 
197.5 
211.1 
216.1 

192.3 
190.9 
181.1 
192.1 
157.7 
120.5 



Non- 
farm 



1,531.3 

1, 274. 
1, 336. 8 
1, 468. 7 
1,614.8 
1, 534. 

1, 487. 5 
1,172.8 
1,298.8 
1,521.4 
1,482.3 

0) 
( 3 > 
< 3 ) 
(?) 
(?) 

(?) 
( 3 ) 
(') 
( 3 ) 



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

( 3 ) 
< 3 ) 
( 3 ) 
( 3 ) 
< 3 ) 
( 3 ) 



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

( 3 ) 
(?) 
( 3 ) 
( 3 ) 
( 3 ) 
( 3 ) 



Private « 



Total (farm and nonfarm) 



Total 



1,517.0 

1, 252. 2 
1,313.0 
1,462.9 
1, 603. 2 
1, 528. 8 

1,472.8 
1,164.9 
1,291.6 
1,507.6 

1, 466. 8 

1,433.6 

2, 052. 2 
2, 356. 6 
2, 045. 3 
1, 337. 7 

1, 160. 4 
1, 537. 5 
1, 987. 1 
2,018.5 



Type of structure 



One 

unit 



1, 234. 

994.7 
974.3 
991.4 
1,012.4 
970.5 

963.7 
778.6 
843.9 
899.4 
810.6 

812.9 
1,151.0 
1, 309. 2 
1,132.0 

888.1 

892.2 
1,162.4 
1,450.9 
1,432.7 



2 to 4 
units 



5 units 



283.0 

257.4 
338.7 
471.5 
590.8 
108. 4 450. 



86.6 
61.1 
71.6 
80.9 
85.0 

84.8 
120.3 
141.3 
118.3 

68.1 

64. C 
85.9 
121.7 
125.7 



422.5 
325.1 
376.1 
527.3 
571.2 

535.9 
780.9 
906.2 
795.0 



New private housing units 
authorized ' 



Total 



1, 208. 3 

998.0 
1,064.2 
1,186.6 
1,334.7 
1,285.8 

1,239.8 
971.9 
1,141.0 
1,353.4 
1,323.7 

1,351.5 
1,924.6 
2,218.9 
1,819.5 



381.6 1,074.4 



204.3 
289.2 
414.4 
460.2 



Type of structure 



One 

unit 



938.3 

746.1 
722.8 
716.2 
750.2 
720.1 

709.9 
563.2 
650.6 
694.7 
625.9 

646.8 
906.1 
1, 033. 1 
882.1 
643.8 



939. 2 675. 5 

1,296.2 893.6 

1,690.0 1,126.1 

1,658.4 1,077.6 



2 to 4 
units 



77.1 

64.6 
67.6 
87.1 
118.9 

100.8 

84.8 
61.0 
73.0 
84.3 
85.2 

88.1 
132.9 
148.6 
117.0 

64.3 

63.9 
93.1 
121.3 
124.0 



Seasonally adjusted annual rates 



5 units 
or more 



192.9 

187.4 
273.8 
383.3 
465.6 
464.9 

445.1 
347.7 
417.5 
574.4 
612.7 

616.7 
885.7 
1,037.2 
820.5 
366.2 

199.8 
309.5 
442.7 
456.8 



1,393 


1,011 


104 


278 


1,454 


991 


116 


1,751 


1,362 


116 


273 


1,538 


1,059 


113 


2,090 


1,489 


114 


487 


1,663 


1,138 


113 


1,899 


1,433 


118 


348 


1,655 


1,088 


113 


1,982 


1,469 


120 


393 


1,656 


1,099 


112 


1,931 


1,406 


113 


412 


1,739 


1,114 


119 


2,072 


1,453 


124 


495 


1,678 


1,114 


120 


2,038 


1,454 


119 


465 


1,770 


1,148 


136 


2,012 


1,508 


124 


380 


1,695 


1,139 


123 


2,139 


1,532 


127 


480 


1,781 


1,186 


129 


2,096 


1,544 


134 


418 


1,822 


1,218 


144 


2,203 


1,574 


153 


476 


1,778 


1,188 


122 


1,548 


1,156 


101 


291 


1,526 


1,032 


101 


1,569 


1,103 


79 


387 


1,534 


957 


107 


2,047 


1,429 


126 


492 


1,647 


1,037 


127 


2,165 


1,492 


142 


531 


1,740 


1,157 


117 


2,054 


1,478 


89 


487 


1,597 


1,058 


112 


2,124 


1,441 


148 


535 


1,821 


1,123 


156 


2,119 


1,453 


135 


531 


1,632 


1,035 


107 


2,025 


1,440 


139 


446 


1,563 


1,020 


125 


2,075 


1,463 


111 


501 


1,731 


1,092 


125 


2,106 


1,455 


139 


512 


1,719 


1,127 


133 


2,155 


1,558 


156 


441 


1,724 


1,114 


131 


2,125 


1,533 


133 


459 


1,680 


1,158 


148 



347 
366 
412 
454 
445 
506 

444 
486 
433 
466 
460 
468 



393 
470 
483 
466 
427 
542 

490 
418 
514 
459 
479 
374 



1 Units in structures built by private developers for sale upon completion to local public housing authorities under the 
Department of Housing and Urban Development "Turnkey" program are classified as private housing. Military housing 
starts, including those financed with mortgages insured by FHA under Section 803 of the National Housing Act, are included 
in publicly owned starts and excluded from total private starts. 

2 Authorized by issuance of local building permit: in 14,000 permit-issuing places beginning 1972; 13,000 for 1967-71; 
12,000 for 1963-66; and 10,000 prior to 1963. 

* Not available separately beginning January 1970. 

Note.— Only the series on private and public nonfarm housing units started is available prior to 1959. See 1976 "Eco- 
nomic Report" for this earlier series. 

Source: Department of Commerce, Bureau of the Census. 

234 



Table B-45. — Business expenditures for new plant and equipment, 1947-79 l 
[Billions of dollars; quarterly data at seasonally adjusted annual rates] 



Year 
or quarter 



Total 



Manufacturing 



Nonmanufacturing 



Total 



Dura- 
ble 
goods 



Non- 
durable 
goods 



Total 



Mining 



Transportation 



Rail- 
road 



Air 



Other 



Public 
utili- 
ties 



Com- 
muni- 
cation 



Com- 
mer- 
cial 
and 
other' 



1947 

1948. 

1949 

1950 

1951.. 

1952 

1953 

1954. 

1955 

1956 

1957 

1958 

1959 

1960 

1961 

1962 

1963 

1964 

1965 

1966.. 

1967 

1968 

1969 

1970 

1971 

1972 

1973 

1974 

1975 

1976 

1977 

1978' 

1979' 

1976: I 

II.... 

Ill 

IV 

1977: I 



II-..- 

III 

IV 



1978: I. 



1979: 



II.... 
III™. 
IV... 

I'.... 
II'.. . 



19.33 
21.30 
18.98 

20.21 
25.46 
26.43 
28.20 
27.19 

29.53 
35.73 
37.94 
31.89 
33.55 

36.75 
35.91 
38.39 
40.77 
46.97 

54.42 
63.51 
65.47 
67.76 
75.56 

79.71 
81.21 
88.44 
99.74 
112.40 

112.78 
120. 49 
135. 80 
153.09 
170. 20 

114.72 
118.12 
122.55 
125.22 

130. 16 
134. 24 
140. 38 
138.11 

144. 25 
150.76 
155.41 
161.24 

163. 34 
167. 82 



8.44 
9.01 
7.12 

7.39 
10.71 
11.45 
11.86 
11.24 

11.89 
15.40 
16.51 
12.38 
12.77 

15.09 
14.33 
15.06 
16.22 
19.34 

23.44 
28.20 
28.51 
28.37 
31.68 

31.95 
29.99 
31.35 
38.01 
46.01 

47.95 
52.48 
60.16 
67.65 
76.99 

49.21 
50.64 
54.78 
54.44 

56.43 
59.46 
63.02 
61.41 

61.57 
67.20 
67.75 
73.20 

73.02 
76.28 



3.25 
3.30 
2.45 

2.94 
4.82 
5.21 
5.31 
4.91 

5.41 
7.45 
7.84 
5.61 
5.81 

7.23 
6.31 
6.79 
7.53 
9.28 

11.50 
14.06 
14.06 
14.12 
15.% 

15.80 
14.15 
15.64 
19.25 
22.62 

21.84 
23.68 
27.77 
31.75 
36.89 

21.63 
22.54 
24.59 
25.50 

26.30 
27.26 
29.23 
28.19 

28.72 
31.40 
32.25 
34.19 

34.13 
35.89 



5.19 
5.71 
4.68 

4.45 
5.89 
6.24 
6.56 
6.33 

6.48 
7.95 
8.68 
6.77 
6.95 

7.85 
8.02 
8.26 
8.70 
10.07 

11.94 
14.14 
14.45 
14.25 
15.72 

16.15 
15.84 
15.72 
18.76 
23.39 

26.11 
28.81 
32.39 
35.90 
40.11 

27.58 
28.09 
30.20 
28.93 

30.13 
32.19 
33.79 
33.22 

32.86 
35.80 
35.50 
39.02 

38.89 

40.40 



10.89 
12.29 
11.86 

12.82 
14.75 
14.98 
16.34 
15.95 

17.64 
20.34 
21.43 
19.51 
20.78 

21.66 
21.58 
23.33 
24.55 
27.62 

30.98 
35.32 
36.% 
39.40 
43.88 

47.76 
51.22 
57.09 
61.73 
66.39 

64.82 
68.01 
75.64 
85.44 
93.20 

65.51 
67.48 
67.76 
70.78 

73.74 
74.78 
77.36 
76.70 

82.68 
83.56 
87.66 
88.04 

90.31 
91.53 



0.69 
.93 



.84 
1.11 
1.21 
1.25 
1.28 

1.31 
1.64 
1.69 
1.43 
1.36 

1.30 
1.29 
1.40 
1.27 
1.34 

1.45 
1.62 
1.65 
1.63 
1.86 

1.89 
2.16 
2.42 
2.74 
3.18 

3.79 
4.00 
4.50 
4.84 
5.31 

3.83 
3.83 
4.21 
4.13 

4.24 
4.49 
4.74 
4.50 

4.45 
4.81 
4.99 
5.23 

4.94 



0.91 
1.37 
1.42 

1.18 
1.58 
1.50 
1.42 
.93 

1.02 
1.37 
1.58 
.86 
1.02 

1.16 
.82 
1.02 
1.26 
1.66 

1.99 
2.37 
1.86 
1.45 
1.86 

1.78 
1.67 
1.80 
1.% 
2.54 

2.55 
2.52 
2.80 
3.22 
3.83 

2.08 
2.64 
2.69 
2.63 

2.71 
2.57 
3.20 
2.80 

3.35 
3.09 
3.38 
3.14 

4.05 



0.17 

.10 



.10 
.14 
.24 
.24 
.24 

.26 

.35 
.41 
.37 
.78 

.66 
.73 
.52 
.40 
1.02 

1.22 
1.74 
2.29 
2.56 
2.51 

3.03 
1.88 
2.46 
2.41 
2.00 

1.84 
1.30 
1.62 
2.36 
2.66 

1.18 
1.44 
1.12 
1.41 

1.62 
1.43 
1.69 
1.76 

2.67 
2.08 
2.20 
2.61 

3.05 



1.13 
1.17 
.76 

1.09 
1.33 
1.23 
1.29 
1.22 

1.30 
1.31 
1.30 
1.% 
1.33 

1.30 
1.23 
1.65 
1.58 
1.50 

1.68 
1.64 
1.48 
1.59 
1.68 

1.23 
1.38 
1.46 
1.66 
2.12 

3.18 
3.63 
2.51 
2.39 
2.67 

3.29 
4.16 
3.44 
3.49 

2.% 
2.% 
1.% 
2.32 

2.44 
2.23 
2.47 
2.40 

2.99 



1.54 
2.54 
3.10 

3.24 
3.56 
3.74 
4.34 
3.99 

4.03 
4.52 
5.67 
5.52 
5.14 

5.24 
5.00 
4.% 
4.98 
5.49 

6.13 
7.43 
8.74 
10.20 
11.61 

13.14 
15.30 
17.00 
18.71 
20.55 

20.14 
22.28 
25.80 
29.16 
32.56 

21.91 
21.85 
21.67 
23.46 

25.35 
25.29 
26.22 
26.23 

27.92 
28.46 
29.62 
30.59 

30.70 



1.40 
1.74 
1.34 

1.14 
1.37 
1.61 
1.78 
1.82 

2.11 
2.82 
3.19 
2.79 
2.72 

3.24 
3.39 
3.85 
4.06 
4.61 

5.30 
6.02 
6.34 
6.83 
8.30 

10.10 
10.77 
11.89 
12.85 
13.% 

12.74 
13.30 
15.45 
18.04 



46.17 



5. OS 
4.42 
4.24 

5.22 
5.67 
5.45 
6.02 
6.45 

7.63 
8.32 
7.60 
7.48 
8.44 

8.75 
9.13 
9.99 
10.99 
12.02 

13.19 
14.48 
14.59 
15.14 
16.05 

16.59 

18.05 
20.07 
21.40 
22.05 

20.60 
20.99 
22.97 
25.42 



12.54 
12.62 
13.64 
14.30 

14.19 
15.32 
16.40 
15.82 

17.07 
18.18 
18.90 



44.07 
44.59 



20.68 
20.94 
20.99 
21.36 

22.67 
22.73 
23.14 
23.27 

24.76 
24.71 
26.09 



1 Excludes agricultural business; real estate operators; medical, legal, educational, and cultural services; and nonprofit 
organizations. These figures do not agree precisely with the nonresidential fixed investment data in the gross national 
product estimates, mainly because those data include investment by farmers, professionals, nonprofit institutions, and 
real estate firms, and certain outlays charged to current account. 

3 Commercial and other includes trade, service, construction, finance, and insurance. 

' Planned capital expenditures as reported by business in late October-December 1978. Plans are adjusted when 
necessary for systematic bias. 

Source: Department of Commerce, Bureau of Economic Analysis. 



235 



Table B^4 6. — Sales and inventories in manufacturing and trade, 1947-78 
lAmounts in millions of dollars; monthly data seasonally adjused] 



Year or month 


Total manufacti 
and trade 


ring 


Manufacturing 


Merchant wholesalers 


Retail trade 




Sales i 


Inven- 
tories 2 


Ratio 3 


Sales i 


Inven- 
tories ' 


Ratio 3 


Sales > 


Inven- 
tories ' 


Ratio » 


Sales > 


Inven- 
tories 2 


Ratio > 


1947 








15,513 
17,316 
16, 126 

18,634 
21,714 

22, 529 
24, 843 

23, 355 

26, 480 

27, 740 
28, 736 
27, 247 
30, 286 

30, 879 
30, 923 
33, 357 
35, 058 
37, 331 

40,995 
44, 870 
46, 487 
50, 268 
53, 540 

52, 832 
55, 925 
63, 043 
72, 954 
84, 821 

86,616 
98, 809 
111,256 

105, 303 
107, 184 
111,090 
109,521 
109,641 
111,003 

109, 827 
112,019 
112,586 
114,091 
114,342 
117,938 

114,322 
118,982 
121,101 
124, 537 

123, 566 

124, 839 

123, 106 
127,871 
127,919 
130, 614 
132, 459 


25, 897 
28, 543 
26, 321 

31,078 
39, 306 
41,136 
43, 948 
41,612 

45, 069 
50, 642 
51,871 
50, 241 
52, 945 

53, 780 
54,885 
58, 186 
60, 046 
63, 403 

68, 185 
77, 952 
84,624 
90, 550 
98, 161 

101,609 
102, 622 
108, 223 
124, 545 
157,811 

157, 878 
169, 886 
179, 714 

170, 554 
171,575 
172, 536 
174,015 
175,716 

176, 468 

177, 297 

178, 082 
179,011 

179, 301 

179, 840 
179,714 

180, 977 

182, 393 

183, 860 
185, 715 
187, 689 
189, 557 

191, 167 
192, 882 
194, 063 
194, 735 
196, 525 


1.58 
1.57 
1.75 

1.48 
1.66 
1.78 
1.76 
1.81 

1.62 
1.73 
1.80 
1.84 
1.70 

1.75 
1.74 
1.70 
1.69 
1.64 

1.60 
1.62 
1.76 
1.74 
1.77 

1.90 
1.83 
1.67 
1.58 
1.65 

1.83 
1.66 
1.58 

1.62 
1.60 
1.55 
1.59 
1.60 
1.59 

1.61 
1.59 
1.59 
1.57 
1.57 
1.52 

1.58 
1.53 
1.52 
1.49 
1.52 
1.52 

1.55 
1.51 
1.52 
1.49 
1.48 








10,200 
11,135 
11,149 

12,268 
13,046 
13,529 
14, 091 
14,095 

15,321 
15,811 
16, 667 
16,696 
17,951 

18,294 

18, 249 

19, 630 
20.556 
21,823 

23, 677 
25, 330 
24, 413 
27, 092 

29, 041 

30, 924 
34, 169 
37, 422 
41, 871 
44,543 

48, 370 
53, 542 
59, 029 

55,671 
57, 169 
57,850 

57, 929 

58, 052 
57, 851 

58, 669 
59, 177 

59, 412 
60, 720 

61, 650 
61,813 

59, 987 
61,548 

62, 649 

63, 917 

64, 292 
64,565 

64, 343 

65, 862 

66, 347 
67,389 
68, 181 
68,889 


14, 241 
16, 007 
15,470 

19,460 
21,050 
21,031 
21,488 
20, 926 

22, 769 
23, 402 
24, 451 
24; 113 

25, 305 

26,813 

26, 221 
27, 941 
29, 386 
31,094 

34, 405 
38, 073 

35, 299 
38, 945 

42, 517 

43, 867 
50,063 
55, 079 
62,950 
70, 716 

70, 623 
78, 045 
87, 073 

78, 560 
78, 851 
80, 140 
80, 957 
81,696 
82, 636 

83,483 
84,462 
85, 215 

85, 322 

86, 299 

87, 073 

87, 708 
87, 642 
89, 097 
89,963 
91,063 

91, 543 

92, 470 

93, 680 

93, 664 

94, 301 
S5, 930 


1.26 


1948 


35, 260 
33, 788 

38, 596 

43, 356 

44, 840 
47,987 
46, 443 

53,694 

54, 063 

55, 879 
54, 201 

59, 729 

60, 827 
61, 159 
65, 662 
68, 995 
73, 682 

80, 283 
87, 187 
90, 348 
98,206 


52, 507 
49, 497 

59, 822 
70, 242 
72, 377 
76, 122 
73, 175 

79, 516 
87, 304 
89, 052 
87,093 
92, 129 

94, 713 

95, 594 
101,063 
105,480 
111,503 

120, 907 
136, 790 
145, 300 
156. 099 


1.42 
1.53 

1.36 
1.55 
1.58 
1.58 
1.60 

1.47 
1.55 
1.59 
1.60 
1.50 

1.56 
1.54 
1.50 
1.49 
1.47 

1.45 
1.47 
1.56 
1.54 
1.55 

1.62 
1.58 
1.50 
1.44 
1.47 

1.58 
1.48 
1.44 

1.47 
1.45 
1.43 
1.45 
1.45 
1.46 

1.46 
1.46 
1.47 
1.45 
1.44 
1.41 

1.47 
1.43 
1.43 
1.40 
1.41 
1.41 

1.43 
1.40 
1.41 
1.38 
1.39 


6,808 
6,514 

7,695 
8,597 
8,782 
9,052 
8,993 

9,893 
10,513 
10, 475 
10, 257 
11,491 

11,656 
11,988 
12,674 
13,382 
14, 529 

15,611 
16, 987 
19, 448 
20,846 
22, 609 

23, 943 
26, 257 
29, 584 
36, 822 
45, 836 

44, 633 
48, 408 
53, 509 

50, 678 

51, 857 

52, 672 

53, 385 
53, 866 
53, 735 

53, 495 
53, 208 
53, 307 
53, 639 
55, 558 
57, 266 

55, 985 

57, 635 

58, 877 
62, 152 
64,011 
63, 235 

63, 404 

64, 573 
64, 045 
67, 292 
67, 483 


7,957 
7,706 

9,284 
9,886 
10,210 
10.686 
10, 637 

11,678 
13, 260 
12, 730 
12,739 
13,879 

14,120 
14,488 
14, 936 
16, 048 
17,000 

18, 317 
20, 765 

25, 377 

26, 604 
29, 114 

32, 803 
35, 823 
39, 786 
46, 254 
56, 537 

55, 113 
61, 307 
67, 998 

62, 123 

63, 062 
64,300 
65, 301 

64, 838 
64, 947 

64, 210 

65, 095 
66, 119 

66, 209 

67, 047 

67, 998 

68, 991 
70, 361 
72, 882 

74, 867 

75, 474 
75, 820 

75, 664 

76, 253 

77, 020 

78, 346 

79, 024 


1.13 
1.19 

1.07 
1.16 
1.12 
1.17 
1.18 

1.13 
1.19 
1.23 
1.24 
1.15 

1.22 
1.20 
1.16 
1.15 
1.14 

1.15 
1.15 
1.25 
1.25 
1.23 

1.29 
1.30 
1.27 
1.17 
1.12 

1.24 
1.21 
1.21 

1.23 
1.22 
1.22 
1.22 
1.20 
1.21 

1.20 
1.22 
1.24 
1.23 
1.21 
1.19 

1.23 
1.22 
1.24 
1.20 
1.18 
1.20 

1.19 
1.18 
1.20 
1.16 
1.17 


1.39 


1949 

1950 


1.41 
1.38 


1951. 


1.64 


1952 


1.52 


1953 


1.53 


1954 


1.51 


1955 


1.43 


1956 


1.47 


1957 


1.44 


1958 


1.43 


1959 

1960 


1.40 
1.45 


1961 


1.43 


1962 


1.38 


1963 


1.39 


1964 


1.40 


1965... 


1.39 


1966 


1.44 


1967 


1.43 


1968 


1.38 


1969 


105, 190 16! 


1.40 


1970 


107, 698 
116, 351 
130, 049 
151,647 
175, 200 

179,621 
200, 760 

223, 793 

211,652 
216,210 
221,612 
220, 835 

221, 559 

222, 589 

221, 991 

224, 404 

225, 305 
228, 450 
231, 550 
237, 017 

230, 294 
238, 165 
242, 627 

250, 606 

251, 869 

252, 639 

250, 853 
258, 306 
258,311 
265, 295 
268, 123 


178, 279 
188, 508 
203, 088 
233, 749 
285, 064 

283, 614 

309, 238 
334, 785 

311,237 
313, 488 
316,976 
320, 273 
322, 250 
324,051 

324, 990 
327, 639 
330, 345 
330, 832 
333, 186 
334, 785 

337, 676 
340,396 
345, 839 
350, 545 
354, 226 
356, 920 

359, 301 
362,815 
364, 747 
367, 382 
371,479 


1.40 


1971 

1972 


1.39 
1.40 


1973 


1.41 


1974 

1975 

1976 

1977.. .. 

1977: Jan 
Feb 
Mar 

Apr 

May 

June 

July 

Aug 

Sept 

Oct 

Nov 

Dec 

1978: Jan 

Feb 
Mar 

Apr 

May 

June 

July 

Aug 

Sept 

Oct 

Nov » 

Dec ' 


1.48 

1.43 
1.39 
1.40 

1.41 
1.38 
1.39 
1.40 
1.41 
1.43 

1.42 
1.43 
1.43 
1.41 
1.40 
1.41 

1.46 
1.42 
1.42 
1.41 
1.42 
1.42 

1.44 
1.42 
1.41 
1.40 
1.41 



























i Monthly average for year and total for month. 
> Seasonally adjusted, end of period. 

3 Inventory /sales ratio. For annual periods, ratio of weighted average inventories to average monthly sales; for monthly 
data, ratio of inventories at end of month to sales for month. 

Note. — Earlier data are not strictly comparable with data beginning 1958 for manufacturing and beginning 1967 for 
wholesale and retail trade. 

1 he inventory figures in this table do not agree with the estimates of change in business inventories included in the gross 
national product since these figures cover only manufacturing and trade rather than all business, and show inventories in 
terms of current book value without adjustment for revaluation. 

Source: Department of Commerce (Bureau of Economic Analysis and Bureau of the Census). 



236 



Table B-47. — Manufacturers' shipments and inventories, 1947-78 

[Millions of dollars; monthly data seasonally adjusted] 



Year or month 



1977: Jan.... 
Feb... 
Mar... 
Apr... 
May... 
June 

July... 
Aug... 
Sept... 
Oct.... 
Nov... 
Dec... 



1978: Jan.... 
Feb... 
Mar... 
Apr... 

May... 
June... 

July... 
Aug... 
Sept... 
Oct.... 
Nov *■.. 



Shipments' 



Inventories 2 



Total 



15,513 
17,316 
16, 126 

18, 634 
21,714 
22, 529 
24, 843 
23, 355 

26, 480 

27, 740 

28, 736 
27, 247 
30, 286 

30, 879 
30, 923 
33, 357 
35, 058 
37, 331 

40, 995 
44, 870 
46, 487 
50, 268 
53, 540 

52, 832 
55,925 
63, 043 
72, 954 
84, 821 

86, 616 
98, 809 
111,256 

105, 303 
107, 184 
111,090 
109, 521 
109, 641 
111,003 

109, 827 
112,019 
112, 586 
114,091 
114,342 
117,938 

114,322 
118,982 
121,101 
124, 537 
123, 566 
124,839 

123, 106 
127,871 
127,919 
130,614 
132, 459 



Dura- 
ble 
goods 
indus- 
tries 



6,694 
7,579 
7,191 

8,845 
10, 493 
11,313 
13, 349 
11,828 

14,071 
14,715 
15, 237 
13, 563 
15, 609 

15,883 
15,616 

17, 262 

18, 280 

19, 637 

22,221 

24, 649 

25, 267 
27, 698 
29, 477 

28,215 
29, 973 
34, 043 
39, 704 
44, 253 

43, 678 
50, 697 
58, 266 

54, 532 
55,620 
58, 428 

56, 999 
57,273 

58, 049 

57, 463 

58, 649 

59, 285 
60, 316 

60, 228 
62, 130 

59, 973 
63,077 
64,457 
66, 493 
65,417 
66, 293 

65,222 
68, 684 
68, 916 
70, 292 
71,567 



Non- 
durable 
goods 
indus- 
tries 



Total 



8,819 
9,738 
8,935 

9,789 
11,221 
11,216 
11,494 
11,527 

12, 409 
13,025 

13, 499 
13,684 
14,677 

14, 996 

15, 307 

16, 095 

16, 778 

17, 694 

18,774 
20,220 
21,220 
22, 570 
24, 064 

24,617 
25,952 
28, 999 
33,250 
40, 568 

42, 939 
48,112 
52, 990 

50,771 

51, 564 

52, 662 
52, 522 

52,368 175,716 
52,954 176,468 



25, 897 
28, 543 

26, 321 

31,078 
39, 306 
41,136 
43, 948 
41,612 

45, 069 
50, 642 
51,871 
50, 241 
52, 945 

53, 780 

54, 885 
58, 186 
60, 046 
63, 409 

68, 185 
77, 952 
84, 624 
90, 550 
98, 161 

101,609 
102,622 
108, 223 
124, 545 
157,811 

157, 878 

169, 886 
179,714 

170, 554 
171,575 
172, 536 
174,015 



52,364 177,297 113,160 
53,370 178,082 113,917 



Durable goods industries 



Total 



Mate- 
rials 
and 
sup- 
plies 



13,061 
14, 662 
13, 060 

15, 539 
20,991 
23,731 

25, 878 
23,710 

26, 405 
30, 447 
31,728 
30, 258 
32, 077 

32,371 
32, 544 

34, 632 

35, 866 
38, 506 

42, 257 
49, 920 
54, 978 
58, 825 
64, 705 

66, 752 
66,271 
70, 244 
81,333 
101, 790 

101, 580 

108, 968 
115,424 

109, 609 
110,242 
110,579 
111,133 
112,071 
112,536 



53,301 
53, 775 
54, 114 
55, 808 



179,011 l 114,467 



179, 301 
179, 840 
179,714 



54, 349 180, 977 

55, 905 182, 393 
56,644,183,860 
58, 044 185, 715 
58, 149 187, 689 121,471 
58,5461189,557 122," 



114,448 
115,212 
115,424 



116,278 
117,511 
118,725 
119,848 



57,884 191,167 
59, 187 192, 882 
59, 003 194, 063 
60,322 194,735:126,784 
60,892 196, 525| 128, 293 



123, 830 
125, 206 
126, 176 



8,966 
7,894 

9,194 
10,417 
10, 608 
10, 032 
10, 776 

10, 353 
10, 279 
10, 810 
11,068 
11,970 

13,325 
15, 489 
16,441 
17, 365 
18,692 

19, 184 
19,763 
20, 877 
26, 039 
35,221 

33, 599 
36, 540 
38, 719 

36, 624 
36,710 
37, 104 

37, 304 

38, 214 
38, 675 

38, 540 
38,901 

39, 072 
39,011 
38, 793 
38,719 

38, 177 
38, 535 
38, 547 

38, 794 

39, 484 
39, 667 

39, 727 

40, 343 
41,133 
40, 916 
41,125 



Work 

in 
process 



10, 720 
9,721 

10, 756 
12,317 
12, 837 

12, 387 
13, 063 

12,772 

13, 203 
14, 159 

14, 871 
16, 191 

18,075 
21,939 
25, 005 

27, 302 
30, 373 

29, 824 

28, 639 

30, 786 
35, 504 
42,634 

42, 804 

44, 735 
46, 864 

45, 138 
45, 489 
45, 296 
45, 670 
45,216 

44, 884 

45, 452 
45,911 

46, 227 

45, 996 

46, 515 

46, 864 

47, 785 

48, 696 

49, 491 

50, 330 
50, 966 
51,684 

52, 763 

53, 296 

53, 375 

54, 210 
54, 849 



Fin- 
ished 
goods 



6,206 
6,040 

6,348 
7,565 
8,125 
7,839 
8,239 

9,24! 
9,063 
9,662 
9,925 
10, 344 

10, 854 
12,491 

13, 534 

14, 157 
15,639 

17, 745 
17,871 

18, 577 

19, 788 
23, 934 

25, 177 
27, 693 
29, 843 

27, 847 

28, 043 
28, 178 
28, 160 
28, 643 

28, 980 

29, 166 
29, 107 
29, 169 
29, 441 
29, 906 

29, 843 

30, 316 
30, 280 
30, 687 

30, 724 
31,021 

31, 337 

31, 340 
31, 567 
31,668 

31, 658 

32, 319 



Nondurable goods industries 



Total 



12, 836 
13, 881 
13,261 

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

17, 902 

18, 664 
20, 195 
20, 143 

19, 983 

20, 868 

21,409. 

22, 341 

23, 554 
24, 180 

24, 903 

25,928 

28, 032 

29, 646 
31,725 

33, 456 

34, 857 
36,351 
37, 979 
43,212 
56, 021 

56, 298 
60,918 
64, 290 

60, 945 
61,333 

61, 957 

62, 882 
63,645 

63, 932 

64, 137 
64, 165 

64, 544 
64,853 
64,628 
64, 290 

64, 699 

64, 882 
65, 135 

65, 867 
66,218 

66, 869 

67, 337 
67, 676 

67, t87 
67,951 

68, 232 



Mate- 
rials 
and 
sup- 
plies 



Work 

in 
process 



8,317 
8,167 

8,556 
8,971 
8,775 
8,662 
9,080 

9,082 
9,493 
9,813 
9,978 
10,131 

10, 448 
11,155 
11,709 
12,283 
12,721 

13, 147 
13,678 
14,672 
18,114 
23,661 

23, 123 

24, 945 

25, 102 

24, 857 

25, 200 
25, 564 

25, 999 

26, 063 
26, 162 

25, 851 
25, 787 
25,727 
25,623 
25, 297 
25, 102 

25, 190 
25, 332 
25, 730 
25, 742 

25, 825 

26, 314 

26, 145 
26, 024 
26, 108 
26, 171 
26, 393 



2,472 
2,440 

2,571 
2,721 
2,864 
2,828 
2,944 

2,946 
3,110 
3,296 
3,406 
3,511 

3,806 
4,204 
4,420 
4,845 
5,119 

5,271 
5,666 
5,982 
6,708 
8,175 

8,675 
9,557 
10,116 

9,552 
9,587 
9,784 
9,824 
9,918 
9,862 

9,960 
9,919 
10,011 
10, 178 
10, 165 
10, 116 

10, 145 
10, 258 
10, 208 
10, 352 
10, 354 
10, 277 

10, 348 
10, 352 
10, 484 
10, 754 
10, 644 



1 Monthly average for year and total for month. 

2 Book value, seasonally adjusted, end of period, except as noted. 

Note.— Data beginning 1958 are not strictly comparable with earlier data. 
Source: Department of Commerce, Bureau of the Census. 



237 



Table B-48. — Manufacturers' new and unfilled orders, 1947-78 
lAmounts in millions of dollars; monthly data seasonally adjusted] 



Year or month 



New orders • 



Total 



15,256 
17,693 
15,614 

20, 110 
23. 907 
23, 204 
23, 586 
22, 335 

27, 465 
28,368 
27, 559 
27, 002 
30, 724 

30, 235 
31, 104 
33, 436 
35, 524 
38, 357 

42, 100 

46, 402 

47, 062 
50, 684 
54, 004 

52, 078 
56,016 
64, 201 
76, 224 
87, 200 

85, 058 
99, 134 
112,842 

107, 256 

108, 047 
112,190 
111,269 
111,102 
112,141 

108, 868 
112,615 
113,680 
117,331 
117,024 
122, 128 

117, 899 
122, 544 
125, 801 
128, 175 
128, 450 
127, 580 

123, 279 
130,952 
131,840 
137, 162 
137, 520 



Durable goods 
industries 



Total 



6,388 
8,126 
6,633 

10,165 
12,841 
12,061 
12,147 
10,768 

14. 996 
15,365 
14.111 
13, 290 
16,003 

15, 303 
15, 759 

17, 374 

18, 709 
20, 652 

23, 278 
26, 177 
25, 831 
28,113 
29, 925 

27, 429 
30, 030 
35, 098 
42, 894 
46, 783 

41,933 

50. 997 
59, 795 

56, 358 
56, 426 
59, 294 
58, 800 

58, 835 
59,111 

56, 367 

59, 269 

60, 364 
63, 556 

62, 821 
66, 165 

63, 335 
66, 681 

69, 016 

70, 033 

70, 045 
68, 840 

65, 187 

71, 582 

72, 645 
76, 984 
76, 437 



Capital 
goods 
indus- 
tries, 
non- 
dtfense 



7,070 
7,779 

6,807 
7,535 
8,832 
11,114 
12,691 

10, 781 

12, 501 
15, 201 

14, 674 
14,315 
14,611 
14, 687 

14, 893 

15, 490 

13, 936 

14, 527 
16, 124 

16, 097 

16, 090 
16,988 

16,511 

17, 882 
17, 507 
17, 409 
18, 124 
18,155 

17,074 

19, 344 
20, 149 
22,219 

20, 256 



Non- 
dura- 
ble 
goods 
indus- 
tries 



8,868 
9,566 
8,981 

9,945 
11,066 
11,143 

11, 439 
11,566 

12, 469 

13, 003 

13, 448 
13,712 

14, 720 

14, 932 

15, 345 
16,061 

16, 815 

17, 705 

18, 823 
20, 225 
21,232 
22, 571 
24, 079 

24, 649 

25, 986 
29, 104 
33, 329 
40,417 

43, 125 
48, 137 
53, 047 

50, 898 
51,621 
52, 896 
52, 469 

52, 267 

53, 030 

52, 501 

53, 346 
53, 316 

53, 775 

54, 203 
55,963 

54, 564 

55, 863 

56, 785 
58, 142 
58, 405 
58, 740 

58, 092 

59, 370 
5f, 195 
60, 178 
61, 083 



Unfilled orders 2 



Total 



34, 473 
30, 736 
24,045 

41,456 
67, 266 
75, 857 
61,178 
48, 266 

60, 004 
67,375 
53, 183 
47, 370 
52, 732 

45, 080 

47, 407 

48, 577 
54, 327 
66, 882 

80,071 
98, 401 
104, 989 
109, 330 
115,654 

106, 519 

107, 657 
121,709 
161, 194 
189, 678 

170,686 
174, 553 
193, 659 

176, 506 

177, 369 

178, 469 
180, 217 
181,678 
182,816 

181,857 

182, 453 

183, 547 
186, 787 
189, 469 
193, 659 

197, 235 
200, 798 
205, 500 
209, 133 
214,010 
216,754 

216,922 
219,999 
?23, 921 
230, 464 
235, 528 



Dura- 
ble 
goods 
indus- 
tries 



28, 579 
26,619 
19, 622 

35, 435 
63, 394 
72, 680 
58, 637 
45, 250 

56, 241 
63, 880 
50, 352 
44, 559 
49, 373 

42,514 

44, 375 

45, 965 
51,270 
63, 691 

76, 298 
94, 575 
101,024 
105, 359 
111,487 

101,931 
102, 633 
115,377 
153, 824 
184, 155 

162, 872 
166, 440 
184, 834 

168, 266 

169, 072 
169, 938 
171,739 
173,301 
174, 363 

173, 267 
173,887 

174, 966 
178, 206 
180, 799 
184, 834 

188, 194 
191,798 
196, 359 
199, 895 
|204,516 
207, 067 

207, 026 
1209,922 
! 213,650 
220, 341 
225,213 



Non- 
dura- 
ble 
goods 
indus- 
tries 



5,894 
4,117 
4,423 

6,021 
3,872 
3,177 
2,541 
3,016 

3,763 
3,495 
2,831 
2,811 
3,359 

2,566 
3,032 
2,612 
3,057 
3,191 

3,773 
3,826 
3,965 
3,971 
4,167 

4,588 
5,024 
6,332 
7,370 
5,523 

7,814 
8,113 
8,825 

8,240 
8,297 
8,531 
8,478 
8,377 
8,453 

8,590 
8,566 
8,581 
8,581 
8,670 
8,825 

9,041 
9,000 
9,141 
9,238 
9,494 
9,687 

9,896 
10, 077 
10, 271 
10, 123 
10,315 



Unfilled orders- 
shipments ratio > 



Total 



3.42 

3.63 
3.87 
3.35 
3.09 
3.01 

2.78 
2.63 
2.69 
2.80 
3.10 

3.33 
3.81 
3.71 
3.82 
3.76 

3.66 
3.40 
3.33 
3.92 
4.16 

3.72 
3.22 
3.15 

3.26 
3.23 
3.11 
3.17 
3.19 
3.17 

3.17 
3.12 
3.11 
3.14 
3.17 
3.15 

3.33 
3.22 
3.23 
3.18 
3.28 
3.29 

3.33 
3.22 
3.28 
3.33 
3.35 



Dura- 
ble 
goods 
indus- 
tries 



4.12 

4.27 
4.55 
4.00 
3.69 

3.54 

3.37 
3.13 
3.24 
3.37 
3.72 

3.95 
4.55 
4.42 
4.61 
4.50 

4.41 
4.08 
3.93 
4.64 
5.00 

4.47 
3.85 
3.75 

3.90 
3.85 
3.69 
3.79 
3.80 
3.78 

3.78 
3.73 
3.70 
3.73 
3.77 
3.75 

3.96 
3.82 
3.83 
3.77 
3.94 
3.90 

3.96 
3.79 
3.84 
3.92 
3.94 



1 Monthly average for year and total for month. 
^ Seasonally adjusted, end of period. 

1 Ratio of unfilled orders at end of period to shipments for period; excludes industries with no unfilled orders. Annual 
figures relate to seasonally adjusted data for December. 

Note.— Data beginning 1958 are not strictly comparable with earlier data. 

Source: Department of Commerce, Bureau of the Census. 

238 



PRICES 

Table B-49.— Consumer price indexes by expenditure classes, 1929-78 
11967 = 1001 



Year or month 



July 

Aug. 

Sept 

Oct 

Nov 



All 

items 



51.3 
38.8 
41.6 

42.0 
44.1 
48.8 
51.8 
52.7 
53.9 
58.5 
66.9 
72.1 
71.4 

72.1 
77.8 
79.5 
80.1 
80.5 
80.2 
81.4 
84.3 
86.6 
87.3 

88.7 
89.6 
90.6 
91.7 
92.9 
94.5 
97.2 
100.0 
104.2 
109.8 

116.3 
121.3 
125.3 
133.1 
147.7 
161.2 
170.5 
181.5 

175.3 
177.1 
178.2 
179.6 
180.6 
181.8 

182.6 
183.3 
184.0 
184.5 
185.4 
186.1 



195.3 

196.7 
197.8 
199.3 
200.9 
202.0 



Food and 
beverages 



Housing 



Total ' 



100.0 
103.6 
108.8 

114.8 
118.3 
123.2 
139.5 
158.8 
172.1 
177.4 
188.JD 

179.9 
183.8 
184.6 
186.8 
187.5 
189.3 

190.2 
190.8 
190.2 
190.1 
191.2 
191.9 

194.6 
197.3 
199.5 
202.6 
205.2 
208.5 

209.7 
210.1 
210.3 
211.6 
212.5 



Food 



48.3 
30.6 
34.6 

35.2 

38.4 
45.1 
50.3 
49.6 
50.7 
58.1 
70.6 
76.6 
73.6 

74.5 
82.8 
84.3 
83.0 
82.8 
81.6 
82.2 
84.9 
88.5 
87.1 

88.0 
89.1 
89.9 
91.2 
92.4 
94.4 
99.1 
100.0 
103.6 
108.9 

114.9 
118.4 
123.5 
141.4 
161.7 
175.4 
180.8 
192.2 

183.4 
187.7 
188.6 
190.9 
191.7 
193.6 

194.6 
195.2 
194.5 
194.4 
195.6 
196.3 

199.2 
202.0 
204.2 
207.5 
210.3 
213.8 

215.0 
215.4 
215.6 
216.8 
217.8 



Total: 



52.2 

52.4 
53.7 
56.2 
56.8 
58.1 
59.1 
60.6 
65.2 
69.8 
70.9 

72.8 
77.2 
78.7 
80.8 
81.7 
82.3 
83.6 
86.2 
87.7 
88.6 

90.2 
90.9 
91.7 
92.7 
93.8 
94.9 
97.2 
100.0 
104.0 
110.4 

118.2 
123.4 
128.1 
133.7 
148.8 
164.5 
174.6 
186.5 

180.3 
181.4 
182.6 
183.7 
184.6 
186.0 

187.4 
188.3 
189.5 
190.4 
191.4 
192.4 

193.8 
195.0 
196.7 
198.3 
199.9 
202.0 

203.8 
205.2 
207.5 
209.5 
210.6 



Rent, 
resi- 
den- 
tial 



76.0 
54.1 
56.0 

56.2 
57.2 



58. 

58. 

58. 

58. 

59. 

61.1 

65.1 

68.0 

70.4 
73.2 
76.2 
E0.3 
83.2 
84.3 
85.9 
87.5 
89.1 
90.4 

91.7 
92.9 
94.0 
95.0 
95.9 
96.9 
98.2 
100.0 
102.4 
105.7 

110.1 

115.2 
119.2 
124.3 
130.6 
137.3 
144.7 
153.5 

149.5 
150.2 
150.8 
151.6 
152.2 
152.9 

153.6 
154.4 
155.3 
156.1 
157.0 
157.9 

158.8 
159.7 
160.5 
161.5 
162.7 
163.6 

164.2 
165.1 
166.4 
167.4 
168.5 



Home 
owner- 
ship 



75.0 
76.3 
77.0 
78.3 
81.7 
83.5 
84.4 

86.3 
86.9 
87.9 
89.0 
90.8 
92.7 
96.3 
100.0 
105.7 
116.0 

128.5 
133.7 
140.1 
146.7 
163.2 
181.7 
191.7 
204.9 

196.7 
198.1 
199.3 
201.0 
202.3 
203.9 

206.2 
207.4 
209.1 
210.0 
211.5 
213.0 

215.0 
216.4 
218.3 
220.4 
222.5 
225.3 

228.3 
230.6 
234.2 
237.0 
238.8 



Fuel 
and 
other 
utili- 
ties' 



83.0 
83.5 
85.1 
87.3 
89.9 
91.7 
93.8 

95.9 
97.1 
97.3 
98.2 
98.4 
98.3 
98.8 
100.0 
101.3 
103.6 

107.6 
115.0 
120.1 
126.9 
150.2 
167.8 
182.7 
202.2 

194.8 
196.4 
198.5 
199.4 
200.2 
201.8 

203.5 
204.5 
205.5 
206.8 
207.4 
207.6 

208.5 
210.6 
212.6 
213.9 
215.5 
217.5 

218.0 
218.1 
218.8 
220.1 
218.5 



Ap- 
parel 
and 
up- 
keep 



48.5 
36.9 
42.4 

42.8 
44.8 
52.3 
54.6 
58.5 
61.5 
67.5 
78.2 
83.3 
80.1 

79.0 
86.1 
85.3 
84.6 
84.5 
84.1 
85.8 
87.3 
87.5 
88.2 

89.6 
90.4 
90.9 
91.9 
92.7 
93.7 
96.1 
100.0 
105.4 
111.5 

116.1 
119.8 
122.3 
126.8 
136.2 
142.3 
147.6 
154.2 

150.0 
150.8 
151.7 
152.3 
153.4 
153.9 

153.4 
154.8 
156.2 
157.2 
158.5 
158.2 

155.7 
154.5 
156.5 
158.4 
159.8 
159.9 

158.0 
159.6 
161.9 
163.3 
164.1 



Trans- 
porta- 
tion 



43.0 

42.7 
44.2 
48.1 
47.9 
47.9 
47.8 
50.3 
55.5 
61.8 
66.4 

68.2 
72.5 
77.3 
79.5 
78.3 
77.4 
78.8 
83.3 
86.0 
89.6 

89.6 
90.6 
92.5 
93.0 
94.3 
95.9 
97.2 
100.0 
103.2 
107.2 

112.7 
118.6 
119.9 
123.8 
137.7 
150.6 
165.5 
177.2 

172.2 

173.2 
174.7 
176.7 
178.1 
179.1 

179.2 
178.8 
178.4 
178.6 
178.7 
178.8 

179.0 
179.4 
179.9 
181.1 
183.2 
185.5 

187.2 
188.1 
188.7 
189.7 
191.4 



Medical 
care 



36.7 

36.8 
37.0 
33.0 
39.9 
41.1 
42.1 
44.4 
48.1 
51.1 
52.7 

53.7 
56.3 
59.3 
61.4 
63.4 
64.8 
67.2 
69.9 
73.2 
76.4 

79.1 
81.4 
83.5 
85.6 
87.3 
89.5 
93.4 
100.0 
106.1 
113.4 

120.6 
128.4 
132.5 
137.7 
150.5 
168.6 
184.7 
202.4 

194.1 
195.8 
197.6 
199.1 
200.5 
201.8 

203.5 
204.9 
206.3 
207.2 
208.1 
209.3 

211.2 
213.3 
214.5 
215.7 
216.9 
217.9 

219.4 
221.4 
222.6 
224.7 
227.0 



Enter- 
tain- 
ment 



100.0 
105.7 
111.0 

116.7 
122.9 
126.5 
130.0 
139.8 
152.2 
159.8 
167.7 

164.0 
164.8 
165.3 
165.5 
166.6 
167.7 

168.0 
168.6 
169.7 
170.3 
170.4 
171.0 

171.9 
172.9 
174.1 
175.6 
176.2 
176.2 



183.1 
184.0 
187.8 
188.3 
188.8 



1 Includes alcoholic beverages, not shown separately. 

2 Includes other items, not shown separately. Series beginning 1967 not comparable with series for earlier years. 

3 Gas (piped) and electricity; fuel oil, coal, and bottled gas; and other utilities and public services. 

Note. — Beginning January 1978 data are for all urban consumers; earlier data are for urban wage earners and clerical 
workers. 

Source: Department of Labor, Bureau of Labor Statistics. 



239 



Table B-50. — Consumer price indexes by commodity and service groups, 1939-78 

[1967 = 100] 





All 
items 


Commodities 


Services 


Special indexes 


Year or 
month 


All 
com- 
modi- 
ties 


Food 


Commodities less food 


All 
services 


Rent 


Serv- 
ices 
less 
rent 


All 

items 
less 
food 


items 
less 

shel- 
ter 


Non- 
dura- 




All 


Dura- 
ble 


Non- 
dura- 
ble 


ble 

com- 
mod- 
ities 


1939.... 


41.6 

42.0 
44.1 
48.8 
51.8 
52.7 
53.9 
58.5 
66.9 
72.1 
71.4 

72.1 
77.8 
79.5 
80.1 
80.5 
80.2 
81.4 
84.3 
86.6 
87.3 

88.7 
89.6 
90.6 
91.7 
92.9 
94.5 
97.2 
100.0 
104.2 
109.8 

116.3 
121.3 
125.3 
133.1 
147.7 
161.2 
170.5 
181.5 

175.3 
177.1 
178.2 
179.6 
180.6 
181.8 

182.6 
183.3 
184.0 
184.5 
185.4 
186.1 

187.2 
188.4 
189.8 
191.5 
193.3 
195.3 

196.7 
197.8 
199.3 
200.9 
202.0 


40.2 

40.6 
43.3 
49.6 
54.0 
54.7 
56.3 
62.4 
75.0 
80.4 
78.3 

78.8 
85.9 
87.0 
86.7 
85.9 
85.1 
85.9 
88.6 
90.6 
90.7 

91.5 
92.0 
92.8 
93.6 
94.6 
95.7 
98.2 
100.0 
103.7 
108.4 

113.5 

117.4 

120.9 

129.9 

145.5 

158.4 

165.2* 

174.7 

168.7 
170.9 
171.8 
173.3 
174.3 
175.4 

175.8 
176.3 
176.6 
177.0 
177.9 
178.3 

179.2 
180.2 
181.6 
183.5 
185.5 
187.5 

188.6 
189.3 
190.5 
191.8 
192.9 


34.6 

35.2 
38.4 
45.1 
50.3 
49.6 
50.7 
58.1 
70.6 
76.6 
73.5 

74.5 
82.8 
84.3 
83.0 
82.8 
81.6 
82.2 
84.9 
88.5 
87.1 

88.0 
89.1 
89.9 
91.2 
92.4 
94.4 
99.1 
100.0 
103.6 
108.9 

114.9 
118.4 
123.5 
141.4 
161.7 
175.4 
180.8 
192.2 

183.4 
187.7 
188.6 
190.9 
191.7 
193.6 

194.6 
195.2 
194.5 
194.4 
195.6 
1S6.3 

199.2 
202.0 
204.2 
207.5 
210.3 
213.8 

215.0 
215.4 
215.6 
216.8 
217.8 


47.7 

48.0 
50.4 
56.0 
58.4 
61.6 
64.1 
68.1 
76.8 
82.7 
81.5 

81.4 
87.5 
88.3 
88.5 
87.5 
86.9 
87.8 
90.5 
91.5 
92.7 

93.1 

93.4 
94.1 
94.8 
95.6 
96.2 
97.5 
100.0 
103.7 
108.1 

112.5 
116.8 
119.4 
123.5 
136.6 
149.1 
156.6 
165.1 

160.6 
161.6 
162.6 
163.6 
164.7 
165.4 

165.6 
166.0 
166.7 
167.4 
168.1 
168.4 

168.6 
168.8 
170.0 
171.3 
173.0 
174.4 

175.4 
176.3 
177.8 
179.1 
180.3 


48.5 

48.1 
51.4 
58.4 
60.3 
65.9 
70.9 
74.1 
80.3 
86.2 
87.4 

88.4 
95.1 
96.4 
95.7 
93.3 
91.5 
91.5 
94.4 
95.9 
97.3 

96.7 
96.6 
97.6 
97.9 
98.8 
98.4 
98.5 
100.0 
103.1 
107.0 

111.8 
116.5 
118.9 
121.9 
130.6 
145.5 
154.3 
163.2 

158.9 
159.7 
160.8 
162.2 

163.4 
163.9 

164.3 
164.3 
164.5 
165.0 
165.5 
165.9 

166.6 
167.2 
168.3 
169.9 
172.0 
173.9 

175.3 

175.9 
177.2 
178.8 
180.0 


44.3 

44.7 
46.7 
51.6 
53.8 
56.6 
58.6 
62.9 
72.2 
77.8 
76.3 

76.2 
82.0 
82.4 
83.1 
83.5 
83.5 
85.3 
87.6 
88.2 
89.3 

90.7 
91.2 
91.8 
92.7 
93.5 
94.8 
97.0 
100.0 
104.1 
108.8 

113.1 

117.0 
119.8 
124.8 
140.9 
151.7 
158.3 
166.5 

161.9 
163.1 
163.9 
164.7 
165.7 
166.6 

166.6 
167.3 
168.4 
169.2 
170.1 
170.3 

169 7 
ibS. 6 
170.7 
171.8 
172.8 
173.7 

174.1 
175.4 
177.1 
178.1 
179.1 


43.5 

43.6 

44.2 
45.6 
46.4 
47.5 
48.2 
49.1 
51.1 
54.3 
56.9 

58.7 
61.8 
64.5 
67.3 
69.5 
70.9 
72.7 
75.6 
78.5 
80.8 

83.5 
85.2 
86.8 
88.5 
90.2 
92.2 
95.8 
100.0 
105.2 
112.5 

121.6 
128.4 
133.3 
139.1 
152.1 
166.6 
180.4 
194.3 

187.4 
188.7 
190.0 
191.2 
192.2 
193.7 

195.3 
196.3 
197.7 
198.5 
199.5 
200.5 

202.0 
203.5 
204.9 
206.5 
208.0 
209.9 

211.7 

213.4 
215.6 
217.6 
218.6 


56.0 

56.2 
57.2 
58.5 
58.5 
58.6 
58.8 
59.2 
61.1 
65.1 
68.0 

70.4 
73.2 
76.2 
80.3 
83.2 
84.3 
85.9 
87.5 
89.1 
90.4 

91.7 
92.9 
94.0 
95.0 
95.9 
96.9 
98.2 
100.0 
102.4 
105.7 

110.1 
115.2 
119.2 
124.3 
130.6 
137.3 
144.7 
153.5 

149.5 
150.2 
150.8 
151.6 
152.2 
152.9 

153.6 
154.4 
155.3 
156.1 
157.0 
157.9 

158.8 
159.7 
160.5 
161.5 
162.7 
163.6 

164.2 
165.1 
166.4 
167.4 
16 \ 5 


38.1 

38.1 
38.6 
40.3 
42.1 
44.2 
45.1 
46.7 
49.0 
51.9 
54.5 

56.0 
59.3 
62.2 
64.8 
66.7 
68.2 
70.1 
73.3 
76.4 
79.0 

81.9 
83.9 
85.5 
87.3 
89.2 
91.5 
95.3 
100.0 
105.7 
113.8 

123.7 
130.8 
135.9 
141.8 
156.0 
171.9 
186.8 
201.6 

194.3 
195.6 
197.0 
198.4 
199.4 
201.1 

202.8 
203.8 
205.3 
206.2 
207.2 
208.2 

209.8 
211.4 
213.0 
214.6 
216.2 
218.3 

220.4 
222.2 
224.6 
226.7 
227.8 


47.2 

47.3 
48.7 
52.1 
53.6 
55.7 
56.9 
59.4 
64.9 
69.6 
70.3 

71.1 
75.7 
77.5 
79.0 
79.5 
79.7 
81.1 
83.8 
85.7 
87.3 

88.8 
89.7 
90.8 
92.0 
93.2 
94.5 
96.7 
100.0 
104.4 
110.1 

116.7 
122. 1 
125.8 
130.7 
143.7 
157.1 
167.5 
178.4 

172.9 
174.0 
175.1 
176.2 
177.3 
178.4 

179.1 
179.8 
180.9 
181.6 
182.5 
183.1 

183.8 
184.7 
185.9 
187.4 
189.0 
190.6 

192.0 
193.3 
195.1 
196.7 
197.8 


39.7 

39.9 
42.4 
47.7 
51.3 
52.2 
53.6 
59.0 
68.5 
73.9 
72.6 

73.1 
79.2 
80.8 
81.0 
81.0 
80.6 
81.7 
84.4 
86.9 
87.6 

88.9 
89.9 
90.9 
92.1 
93.2 
94.6 
97.4 
100.0 
104.1 
109.0 

114.4 
119.3 
122.9 
131.1 
146.1 
159.1 
168.3 
179.1 

173.0 
175.0 
176.1 
177.5 
178.4 
179.6 

180.2 
180.8 
181.2 
181.7 
182.5 
183.0 

183.8 
185.0 
186.3 
188.1 
189.9 
191.8 

192.7 
193.5 
194.5 
195.8 
196.7 


38.4 


1940 


38.9 


1941 


41.6 


1942 


47.6 


1943 


51.8 


1944 


52.2 


1945 


53.7 


1946 


59.6 


1947 


71.9 


1948 


77.2 


1949 


74.9 


1950 


75.4 


1951 


82.5 


1952 


83.4 


1953.... 


83 2 


1954 


83 2 


1955 


82.5 


1956 


83 7 


1957 


86.3 


1958 


88 6 


1959 


88.2 


1960 


89.4 


1961 


90.2 


1962 


90.9 


1963 


92.0 


1964 


93.0 


1965... 


94 6 


1966 


98.1 


1967 


100.0 


1968 


103.9 


1969 


108.9 


1970 


114.0 


1971 


117.7 


1972 


121.7 


1973 


132.8 


1974 


151 


1975 


163.2 


1976 


169.2 


1977 


178 9 


1977: Jan 

Feb 

Mar 

Apr 

May 

June 

July 

Aug 

Sept 

Oct 

Nov. 

Dec 

1978: Jan 

Feb 

Mar 

Apr 

May 
June 

July 

Aug 

Sept 

Oct 

Nov 


172.4 
175.0 
175.9 
177.4 
178.3 
179.7 

180.1 
180.8 
181.0 
181.4 
182.4 
182.9 

183.9 
185.1 
186.8 
188.8 
190.7 
192.7 

193.6 
194.4 
195.4 
196.6 
197.5 



Note.— Beginning January 1978 data are for all urban consumers; earlier data are for urban wag» earners and 
clerical workers. 

Source: Department of Labor, Bureau of Labor Statistics. 



240 



Table B-51. — Consumer price indexes, selected commodities and services, 1939-78 

11967 = 100] 



Durable commodities Nondurable commodities less food 



Total ' 



48.5 

48.1 
■51.4 

58.4 
60.3 
65.9 
70.9 
74.1 
80.3 
86.2 
87.4 

88.4 
95.1 
96.4 
95.7 
93.3 
91.5 
91.5 
94.4 
95.9 
97.3 

96.7 
96.6 
97.6 
97.9 
98.8 
98.4 
98.5 
100.0 
103.1 
107.0 

111.8 
116.5 
118.9 
121.9 

130.6 
145.5 
154.3 
163.2 



158.9 
159.7 
160.8 
162.2 
163.4 
163.9 

164.3 
164.3 
164.5 
165.0 
165.5 
165.9 

166.6 
167.2 
168.3 
169.9 
172.0 
173.9 

175.3 
175.9 
177.2 
178.8 
180.0 



New 
cars 



Used 
cars 



43.2 

43.3 
46.6 



69.2 
75.6 
82.8 

83.4 
87.4 
94.9 
95.8 
94.3 
90.9 
93.5 
98.4 
101.5 
105.9 

104.5 
104.5 
104.1 
103.5 
103.2 
100.9 
99.1 
100.0 
102.8 
104.4 

107.6 
112.0 
111.0 
111.1 
117.5 
127.6 
135.7 
142.9 

141.1 
140.7 
140.9 
140.6 
141.4 
141.7 

141.6 
141.6 
141.1 
145.7 
148.2 
150.5 

150.9 
151.2 
151.1 
151.2 
152.5 
153.5 

153.9 
153.8 
153.5 
155.5 
158.5 



Services less rent 



Total 



89.2 
75.9 
71.8 
69.1 
77.4 
80.2 
89.5 

83.6 
86.9 
94.8 
96.0 

100.1 
99.4 
97.0 

100.0 
( 3 ) 

103.1 

104.3 
110.2 
110.5 
117.6 
122.6 
146.4 
167.9 
182.8 

177.7 
179.1 
182.7 
187.8 
191.4 
192.2 

190.6 
186.4 
182.5 
178.0 
175.0 
170.7 

169.8 
170.0 
172.3 
177.3 
184.6 
191.5 

195.9 
196.7 
195.9 
195.4 
194.7 



Ap- 
parel 
com- 
mod- 
ities 



Other 



44.3 

44.7 

46.7 
51.6 
53.8 
56.6 
58.6 
62.9 
72.2 
77.8 
76.3 

76.2 
82.0 
82.4 
83.1 
83.5 
83.5 
85.3 
87.6 
88.2 
89.3 

90.7 
91.2 
91.8 
92.7 
93.5 
94.8 
97.0 
100.0 
104.1 
108.8 

113.1 
117.0 
119.8 
124.8 
140.9 
151.7 
158.3 
166.5 

161.9 
163.1 
163.9 
164.7 
165.7 
166.6 

166.6 
167.3 
168.4 
169.2 
170.1 
170.3 

169.7 
169.6 
170.7 
171.8 
172.8 
173.7 

174.1 
175.4 
177.1 
178.1 
179.1 



43.0 

43.5 
45.8 
53.5 
55.9 
59.8 
63.0 
69.5 
80.4 
85.4 
82.0 

81.1 
88.7 
87.7 
86.7 
86.3 
85.8 
87.3 
88.2 
88.2 
89.0 

90.3 
90.8 
91.2 
92.0 
92.8 
93.6 
96.0 
100.0 
105.6 
111.9 

116.5 
120.1 
122.7 
127.1 
136.1 
141.2 
145.8 
151.6 



147.6 
148.5 
149.3 
149.8 
150.9 
151.3 

150.6 
152.1 
153.5 
154.6 
155.9 
155.3 

152.3 
150.7 
152.8 
154.8 
156.1 
156.1 

153.9 
155.5 
157.9 
159.3 
160.0 



Total i 



46.3 

46.8 
48.4 
51.1 
53.2 
54.7 
55.8 
58.2 
66.2 
72.3 
72.4 

72.9 
77.5 
79.0 
81.0 
81.8 
82.1 
84.1 
87.4 
88.3 
89.6 

90.9 
91.3 
92.1 
93.1 
93.9 
95.5 
97.5 
100.0 
103.3 
107.0 

111.2 
115.2 

118.2 
123.4 
143.8 
157.9 
165.7 
175.3 

170.5 
171.8 
172.6 
173.5 
174.5 
175.6 

176.1 

176.3 
177.2 
177.9 
178.6 
179.3 

179.7 
180.3 
181.0 
181.7 
182.6 
183.8 

185.5 
186.6 
188.0 
188.8 
190.0 



Gaso- 
line, 

motor 
oil 

cool- 
ant, 
etc. 



90.6 
89.4 
90.5 

93.0 
92.0 
92.6 
92.4 
91.3 
94.4 
96.8 
100.0 
101.7 
105.1 

106.2 
107.3 
108.8 
118.8 
158.9 
169.7 
176.6 
186.7 

180.0 
182.0 
183.4 
185.4 
187.5 
188.8 

189.2 
189.1 
188.9 
188.5 
188.4 
188.7 

188.6 
188.2 
188.1 
188.9 
190.5 
193.0 

195.7 
198.3 
200.0 
200.4 
201.9 



Fuel 
oil, 
coal, 
and 
bot- 
tled 
gas 



37.1 

38.2 

40.5 
43.1 
45.2 
47.1 
48.0 
51.3 
58.4 
68.6 
70.3 

72.7 
76.5 
78.0 
81.5 
81.2 
82.3 
85.9 
90.3 
88.7 
89.8 

89.2 
91.0 
91.5 
93.2 
92.7 
94.6 
97.0 
100.0 
103.1 
105.6 

110.1 
117.5 
118.5 
136.0 
214.6 
235.3 
250.8 
283.4 



271.7 
278.3 
281.4 
282.0 
282.6 
283.1 

283.7 
284.1 
285.1 
287.2 
289.9 
291.9 

295.2 
296.9 
297.2 
296.6 
295.6 
295.1 

294.5 
294.2 
295.7 
300.1 
306.1 



Total i 



38.1 

38.1 
38.6 
40.3 
42.1 
44.2 
45.1 
46.7 
49.0 
51.9 
54.5 

56.0 
59.3 
62.2 
64.8 
66.7 
68.2 
70.1 
73.3 
76.4 
79.0 

81.9 
83.9 
85.5 
87.3 
89.2 
91.5 
95.3 
100.0 
105.7 
113.8 

123.7 
130.8 
135.9 
141.8 

156.0 
171.9 
186.8 
201.6 



194.3 
195.6 
197.0 
198.4 
199.4 
201.1 

202.8 
203.8 
205.3 
206.2 
207.2 
208.2 

209.8 
211.4 
213.0 
214.6 
216.2 
218.3 

220.4 
222.2 
224.6 
226.7 
227.8 



Gas 
(piped) 
and 
elec- 
tric- 
ity 



Trans- 
porta- 
tion 
serv- 
ices 



82.9 

82.1 
81.4 
81.0 
80.6 
80.3 
79.6 
77.4 
77.1 
79.1 
81.0 

81.2 

81.5 
82.6 
84.2 
85.3 
87.5 
88.4 
89.3 
92.4 
94.7 

98.6 
99.4 
99.4 
99.4 
99.4 
99.4 
99.6 
100.0 
100.9 
102.8 

107.3 
114.7 
120.5 
126.4 
145.8 
169.6 
189.0 
213.4 



204.2 
205.4 
208.5 
209.8 
210.9 
213.0 

216.0 
217.4 
218.0 
219.3 
219.5 
218.9 

219.7 
223.3 
226.6 
229.2 
232.5 
236.5 

237.2 
236.9 
237.9 
240.0 
234.9 



36.1 

36.1 
36.3 
38.2 
38.2 
38.2 
38.2 
39.0 
40.3 
44.9 
50.0 

53.3 
58.3 
62.4 
66.4 
69.2 
69.4 
70.5 
73.8 
78.5 
81.2 

83.3 
85.3 
86.6 
87.5 
89.6 
92.9 
96.8 
100.0 
104.0 
111.3 

123.1 

133.0 
136.0 
136.9 
141.9 
152.7 
174.3 
188.4 



182.9 
183.3 
184.8 
186.7 
187.4 
188.7 

189.4 
190.0 
191.0 
191.3 
192.0 
192.9 

193.7 
194.7 
194.9 
195.3 
195.5 
196.2 

196.9 
197.3 
198.7 
200.4 
202.2 



IVed 
ical- 
care 
serv- 
ices 



32.5 

32.5 
32.7 
33.7 
35.4 
36.9 
37.9 
40.1 
43.5 
46.4 
48.1 

49.2 
51.7 
55.0 
57.0 
58.7 
60.4 
62.8 
65.5 
68.7 
72.0 

74.9 

77.7 

80.2 

82.6 

84.6 

87.3 

92.0 

100.0 

107.3 

116.0 

124.2 
133.3 
138.2 
144.3 
159.1 
179.1 
197.1 
216.7 



207.6 
209.4 
211.5 
213.1 
214.6 
216.0 

217.9 
219.6 
221.1 
222.0 
223 
224.2 

226.5 
228.7 
229.9 
231.3 
232.5 
233.5 

235.4 
237.7 
239.1 
241.5 
244.1 



1 Includes other items not shown separately. 

J Gas (piped) and electricity; fuel oil, coal, and bottled gas; and gasoline, motor oil, coolant, etc. 

» Not available. 

Note.— Beginning January 1978 data are for all urban consumers; earlier data are for urban wage earners and clerical 
workers. 

Source: Department of Labor, Bureau of Labor Statistics. 

241 



Table B-52. — Consumer price indexes for commodity groups, seasonally adjusted, 1975-78 
[1967 = 100, seasonally adjusted] 





All 
com- 
mod- 
ities 


Food 






Commodities less fooc 








Year and 


Total 


Durable commodities 


Nondurables less food 


month 


Total ' 


New 
cars 


Used 
cars 


Total i 


Apparel 
com- 
mod- 
ities 


Gasoline, 

motor 
oil, cool- 
ant, etc. 


Fuel oil, 

coal, and 

bottled 

gas 


1975: Jan.. 


153.8 
154.5 
155.1 
155.8 
156.6 
157.8 

159.5 
159.9 
160.3 
161.4 
161.9 
162.6 

162.9 
162.7 
162.7 
163.4 
164.4 
165.0 

165.4 
166.0 
166.5 
167.1 
167.3 
168.0 

169.3 
171.3 
172.3 
173.7 
174.4 
175.1 

175.2 
175.7 
176.2 
176.7 
177.5 
178.3 

179.9 
180.8 
182.3 
184.0 
185.6 
187.2 

187.9 
188.7 
190.1 
191.5 
192.7 


170.9 
171.2 
170.9 
171.3 
172.6 
174.8 

177.6 
177.3 
177.7 
179.4 
180.2 
181.1 

180.8 
179.6 
178.6 
179.7 
181.0 
181.2 

181.1 
181.6 
181.7 
182.1 
181.5 
182.0 

183.5 
187.4 
188.6 
191.5 
192.6 
193.8 

193.5 
194.3 
194.7 
195.0 
196.0 
196.7 

199.2 
201.6 
204.3 
208.1 
211.2 
214.0 

213.9 
214.5 
215.6 
217.3 
218.0 


144.5 
145.6 
146.6 
147.4 
147.9 
148.6 

149.8 
150.4 
151.0 
151.6 
152.0 
152.6 

153.2 
153.6 
154.1 
154.6 
155.4 
156.2 

156.9 
157.6 
158.3 
159.0 
159.7 
160.5 

161.7 
162.7 
163.4 
164.1 
164.6 
165.1 

165.4 
165.7 
166.2 
166.8 
167.6 
168.4 

169.5 
169.9 
170.9 
171.8 
172.8 
173.9 

174.9 
175.7 
177.2 
178.5 
179.9 


140.0 
141.4 
143.0 
144.0 
144.7 
145.3 

146.2 
146.8 
147.7 
148.3 
148.7 
149.3 

149.9- 
150.6 
151.4 
152.3 
153.4 
154.1 

155.0 
155.7 
156.3 
157.2 
157.6 
158.4 

159.9 
161.1 
161.9 
162.6 
163.3 
163.3 

163.4 
163.6 
163.9 
164.4 
165.1 
166.0 

167.6 
168.7 
169.5 
170.4 
171.8 
173.2 

174.4 
175.2 
176.7 
178.1 
179.6 


122.0 
123.6 
126.8 
127.3 
127.0 
127.4 

127.6 
128.3 
129.2 
129.3 
130.1 
132.5 

132.8 
133.5 
134.0 
134.3 
134.8 
135.0 

135.6 
136.1 
137.0 
138.4 
138.4 
138.5 

139.6 
139.9 
140.4 
140.5 
141.7 
142.3 

142.9 
143.5 
144.1 
145.0 
146.9 
148.4 

149.3 
150.3 
150.5 
151.0 
152.8 
154.1 

155.3 
155.8 
156.8 
154.7 
157.1 


140.7 
142.3 
142.6 
142.1 
141.8 
143.9 

147.2 
149.7 
150.5 
151.5 
151.6 
151.5 

151.4 
154.8 
159.1 
164.0 
167.1 
169.0 

170.2 
171.9 
173.0 
174.4 
177.0 
180.8 

186.3 
191.3 
192.5 
193.1 
190.3 
187.2 

182.7 
178.3 
175.3 
172.8 
173.3 
173.7 

178.0 
181.6 
181.6 
182.2 
183.5 
186.5 

187.8 
188.2 
188.2 
189.7 
192.8 


147.9 
148.6 
149.1 
149.9 
150.4 
151.0 

152.5 
153.0 
153.3 
154.1 
154.4 
155.0 

155.5 
155.7 
156.0 
156.3 
157.0 
157.7 

158.4 
159.0 
159.8 
160.4 
161.1 
161.8 

162.8 
163.7 
164.5 
165.0 
165.8 
166.4 

166.9 
167.2 
167.8 
168.6 
169.4 
169.9 

170.6 
170.1 
171.2 
172.1 
172.8 
173.5 

174.4 
175.2 
176.6 
177.4 
178.4 


140.1 
140.4 
140.5 
140.6 
140.6 
140.6 

141.2 
141.9 
141.5 
141.8 
142.2 
142.5 

143.1 
143.5 
143.9 
144.4 
144.9 
145.4 

145.9 
146.8 
147.6 
147.5 
147.8 
148.4 

149.3 
149.9 
150.2 
150.4 
150.8 
151.8 

152.2 
152.7 
152.6 
152.9 
153.5 
153.8 

154.0 
152.1 
153.6 
155.3 
156.0 
156.5 

155.4 
156.1 
157.0 
157.6 
157.6 


161.0 
161.3 
161.9 
163.2 
164.8 
167.8 

173.5 
174.7 
175.8 
177.1 
177.2 
177.1 

176.7 
174.8 
172.9 
171.9 
172.9 
175.3 

176.1 
177.1 
178.2 
180.1 
181.3 
181.8 

182.1 
184.0 
185.8 
187.3 
188.0 
186.8 

186.0 
185.5 
186.3 
187.9 
189.4 
190.7 

190.9 
190.3 
190.6 
190.8 
191.1 
190.9 

192.4 
194.6 
197.2 
199.8 
202.9 


225.0 


Feb... 


224.5 


Mar 


225.0 




227.5 


May 


230.2 




232.2 


July 


236.6 


Aug 


239.6 


Sept 


243.1 


Oct 


246.1 


Nov 


246.4 


Dec 


246.6 


1976: Jan 


245.0 


Feb 


244.4 


Mar 


244.5 




245.6 


May 


246.7 




249.3 


July 


250.7 


Aug 


253.0 


Sept 


254.9 


Oct 


255.4 




257.6 


Dec 


262.2 


1977: Jan 


267.7 


Feb 


272.9 




278.2 


Apr 


281.1 


May 


283.4 


June 


285.7 


July 


286.6 


Aug 


288.1 


Sept 


289.5 


Oct.. 


289.5 




289.5 


Dec 


289.6 


1978: Jan 


290.8 


Feb 

Mar 

Apr 


291.1 
294.0 
295.7 
296.5 




297.8 


July 


297.5 


Aug.. 


298.4 


Sept 

Oct 


300.2 
302.5 


Nov 


305.8 







1 Includes other items not shown separately. 

Note.— Beginning January 1978, data are for all urban consumers; earlier data are for urban wage earners and clerical 
workers. 

Source: Department of Labor, Bureau of Labor Statistics. 



242 



Table B-53. — Consumer price indexes for service groups and selected expenditure classes, 
seasonally adjusted, 1975-78 

[1967 = 100, seasonally adjusted, except as notedj 





Services 


Selected expenditures classes 










Services less rent 




























Fuel 


House- 
hold 




Year 












and month 


All 


Rent, 










Home 


and 


furnish- 






services 


resi- 




Gas 


Trans- 


Medical 
care 


owner- 


other 


ings 


Energy 3 






dential 


Total ' 


(piped) 


porta- 


ship 


utili- 


and 












and 


tion 






ties - 


opera- 












electricity 


services 


services 






tion 




1975: Jan... 


161.0 


134.3 


165.8 


159.4 


146.1 


170.7 


174.8 


159.5 


146.9 


167.2 


Feb... 


162.3 


134.8 


167.2 


161.6 


146.8 


172.6 


176.8 


160.9 


147.9 


168.5 


Mar... 


163.1 


135.3 


168.1 


162.8 


147.7 


174.3 


178.2 


161.9 


148.6 


169.0 


Apr... 


164.2 


135.8 


169.3 


165.3 


148.9 


175.8 


179.9 


163.8 


149.5 


170.9 


May... 


165.0 


136.4 


170.2 


166.8 


149.6 


177.1 


180.8 


165.3 


150. 1 


172.7 


June.. 


166.2 


136.9 


171.4 


169.4 


150.6 


178.5 


182.0 


167.2 


150.7 


175.9 


July... 


167.0 


137.5 


172.3 


170.8 


151.5 


180.2 


182.5 


168.7 


151.1 


180.1 


Aug... 


167.8 


138.1 


173.1 


172.2 


152.5 


181.3 


182.9 


170.0 


151.7 


181.2 


Sept.. 


169.1 


138.5 


174.7 


175.0 


156.5 


182.9 


183.5 


172.1 


152.5 


182.9 


Oct. . . 


170.1 


139.3 


175.6 


175.8 


157.4 


184.7 


184.1 


173.3 


153.3 


183.0 


Nov... 


171.8 


140.0 


177.5 


177.4 


161.7 


184.3 


186.1 


174.6 


153.8 


183.7 


Dec... 


172.8 


140.5 


178.7 


178.8 


163.1 


186.0 


187.0 


175.6 


154.3 


184.4 


1976: Jan... 


174.6 


141.1 


180.7 


178.8 


166.5 


188.1 


188.2 


175.5 


156.4 


184.5 


Feb... 


175.8 


141.9 


182.0 


180.8 


168.4 


190.1 


188.3 


176.7 


157.3 


184.6 


Mar... 


177.2 


142.6 


183.4 


182.4 


170. e 


192.1 


188.9 


177.8 


158.3 


184.0 


Apr... 


177.9 


143.1 


184.2 


183.4 


171.1 


193.4 


189.3 


178.6 


158.9 


183.9 


May... 


179.0 


143.8 


185.4 


185.8 


172.3 


194.8 


190.4 


180.2 


159.3 


185.7 


June.. 


180.0 


144.5 


186.4 


187.9 


173.5 


196.0 


191.2 


181.8 


159.8 


188.7 


July... 


181.1 


145.2 


187.6 


189.9 


175.3 


197.6 


192.3 


183.2 


160.4 


190.5 


Aug... 


182.3 


145.7 


188.9 


191.4 


176.4 


199.0 


193.5 


184.8 


160.8 


191.5 


Sept.. 


183.3 


146.3 


190.0 


193.2 


178.0 


200.3 


194.0 


186.2 


161.4 


192.5 


Oct... 


184.2 


147.0 


190.9 


196.1 


179.3 


201.9 


194.2 


188.0 


161.9 


193.6 


Nov... 


185.0 


147.5 


191.7 


196.7 


180.2 


204.7 


194.2 


188.6 


162.6 


194.6 


Dec... 


185.6 


148.2 


192.4 


201.1 


180.4 


206.0 


194.2 


191.7 


163.3 


197.2 


1977: Jan... 


. 187. 3 


149.4 


194.1 


203.4 


181.3 


207.7 


196.2 


193.9 


164.0 


199.1 


Feb... 


188.4 


149.9 


195.4 


204.2 


182.7 


209.1 


197.8 


195.0 


164.7 


201.3 


Mar... 


190.0 


150.7 


197.0 


207.1 


184.2 


211.1 


199.5 


197.4 


165.2 


203.5 


Apr... 


191.4 


151.5 


198.6 


208.8 


185.9 


213.0 


201.5 


198.7 


165.7 


205.1 


May... 


192.9 


152.2 


200.2 


210.7 


187.4 


214.8 


203.1 


200.4 


166.4 


206.6 


June.. 


194.3 


153.0 


201.7 


213.0 


189.1 


216.3 


204.5 


202.3 


167.3 


208.1 


July... 


195.7 


153.8 


203.3 


216.4 


190.2 


217.5 


206.4 


204.4 


167.9 


209.6 


Aug... 


196.8 


154.6 


204.4 


218.7 


191.0 


219.1 


207.4 


205.8 


168.6 


210.1 


Sept.. 


197.9 


155.5 


205.6 


219.1 


191.9 


220.8 


208.7 


206.7 


169.1 


210.3 


Oct... 


198.7 


156.2 


206.3 


221.2 


191.8 


222.2 


209.4 


208.1 


169.5 


210.9 


Nov... 


199.5 


157.1 


207.1 


220.2 


192.0 


223.2 


210.9 


207.6 


170.0 


211.2 


Dec... 


200.3 


157.9 


208.0 


218.6 


192.5 


224.7 


212.3 


207.1 


171.0 


211.3 


1978: Jan... 


201.5 


158.8 


209.2 


218.8 


193.2 


226.6 


214.5 


207.7 


171.8 


211.8 


Feb... 


203.0 


159.4 


210.9 


222.0 


194.0 


228.4 


216.0 


209.4 


172.2 


213.0 


Mar... 


204.7 


160.3 


212.8 


225.0 


194.2 


229.6 


218.5 


211.5 


173.5 


214.3 


Apr... 


206.6 


161.5 


214.8 


228.1 


194.2 


231.3 


220.9 


213.2 


174.6 


215.7 


May... 


208.7 


162.7 


217.0 


232.3 


195.5 


232.7 


223.4 


215.5 


175.8 


217.7 


June.. 


210.5 


163.6 


219.0 


236.5 


196.5 


233.9 


226.0 


217.8 


177.5 


220.7 


July... 


212.2 


164.4 


220.9 


237.7 


197.6 


235.0 


228.6 


218.8 


178.3 


222.4 


Aug... 


214.0 


165.3 


222.8 


238.3 


198.4 


237.3 


230.9 


219.4 


179.3 


223.7 


Sept.. 


215.7 


166.6 


224.7 


239.1 


199.7 


238.9 


233.9 


219.9 


180.4 


225.1 


Oct... 


217.5 


167.6 


226.6 


242.2 


201.0 


241.8 


236.6 


221.5 


181.9 


226.5 


Nov... 


218.3 


168.7 


227.3 


235.6 


202.2 


244.5 


238.3 


218.6 


182.8 


225.9 



1 Includes other items not shown separately. 

1 Gas (piped) and electricity; fuel oil, coal, and bottled gas; and other utilities and public services. 
* Gas (piped) and electricity; fuel oil, coal, and bottled gas; and gasoline, motor oil, coolant, etc. Index is not seasonally 
adjusted. 

Note.— Beginning January 1978 data are for all urban consumers; earlier data are for urban wage earners and clerical 
workers. 



Source: Department of Labor, Bureau of Labor Statistics. 



243 



Table B-54. — Changes in consumer price indexes, major groups, 1948-78 
[Percent change) 



Year or 
month 


All items 


Food 


Commodities less 
food 


Services 


All items 
less food 




Dec. 

to 

Dec.' 


Year 

to 

year 


Dec. 

to 

Dec.' 


Year 

to 

year 


Dec. 

to 

Dec.' 


Year 
to 

year 


Dec. 

to 

Dec.' 


Year 

to 

year 


Dec. 

to 

Dec.< 


Year 
to 
year 


1948 

1949 

1950 

1951 

1952 
1953 
1954 

1955 

1956 

1957 

1958 

1959 

1960 

1961 

1962 

1963 
1964 

1965 

1966 

1967 
1968 
1969 

1970 

1971 
1972 
1973 
1974 

1975 
1976 
1977 


2.7 
-1.8 

5.8 
5.9 
.9 
.6 
-.5 

.4 
2.9 
3.0 
1.8 
1.5 

1.5 
.7 
1.2 
1.6 
1.2 

1.9 
3.4 
3.0 
4.7 
6.1 

5.5 
3.4 
3.4 
8.8 
12.2 

7.0 
4.8 
6.8 


7.8 
-1.0 

1.0 
7.9 
2.2 
.8 
.5 

-.4 
1.5 
3.6 
2.7 
.8 

1.6 
1.0 
1.1 
1.2 
1.3 

1.7 
2.9 
2.9 
4.2 
5.4 

5.9 
4.3 
3.3 
6.2 
11.0 

9.1 
5.8 
6.5 


-0.8 
-3.7 

9.6 

7.4 
-1.1 
-1.3 
-1.6 

-.9 
3.1 
2.8 
2.2 

-.8 

3.1 
-.9 
1.5 
1.9 
1.4 

3.4 
3.9 
1.2 
4.3 
7.2 

2.2 
4.3 
4.7 
20.1 
12.2 

6.5 

.6 

8.0 


8.5 
-4.0 

1.4 

11.1 

1.8 

-1.5 

-.2 

-1.4 

.7 

3.3 

4.2 

-1.6 

1.0 
1.3 
.9 
1.4 
1.3 

2.2 
5.0 
.9 
3.6 
5.1 

5.5 
3.0 
4.3 
14.5 
14.4 

8.5 
3.1 
6.3 


5.3 

-4.8 

5.7 

4.6 

-.5 

.2 

-1.4 



2.5 

2.2 

.8 

1.5 

-.3 
.6 
.7 
1.2 

.4 

.7 
1.9 
3.1 
3.7 
4.5 

4.8 
2.3 
2.5 
5.0 
13.2 

6.2 
5.1 
4.9 


7.7 
-1.5 

-.1 

7.5 

.9 

.2 

-1.1 

-.7 
1.0 
3.1 
1.1 
1.3 

.4 
.3 
.7 
.7 
.8 

.6 
1.4 
2.6 
3.7 
4.2 

4.1 
3.8 
2.2 
3.4 
10.6 

9.2 
5.0 
5.4 


6.1 
3.6 

3.6 
5.2 
4.6 
4.2 
1.9 

2.3 
3.1 
4.5 
2.7 
3.7 

2.7 
1.9 
1.7 
2.3 
1.8 

2.6 
4.9 
4.0 
6.1 
7.4 

8.2 
4.1 
3.6 
6.2 
11.3 

8.1 
7.3 
7.9 


6.3 
4.8 

3.2 
5.3 
4.4 
4.3 
3.3 

2.0 
2.5 
4.0 
3.8 
2.9 

3.3 
2.0 
1.9 
2.0 
1.9 

2.2 
3.9 
4.4 
5.2 
6.9 

8.1 
5.6 
3.8 
4.4 
9.3 

9.5 
8.3 
7.7 


5.5 
-.8 

4.1 
5.0 
1.7 
1.7 


.9 
2.6 
3.2 
1.6 
2.3 

1.0 
1.1 
1.2 
1.6 
1.0 

1.6 
3.3 
3.5 
4.9 
5.7 

6.5 
3.1 
3.0 
5.6 
12.2 

7.1 
6.2 
6.3 


7.2 
1.0 

1.1 
6.5 
2.4 
1.9 
.6 

.3 
1.8 
3.3 
2.3 
1.9 

1.7 
1.0 
1.2 
1.3 
1.3 

1.4 
2.3 
3.4 
4.4 
5.5 

6.0 
4.6 
3.0 
3.9 
9.9 

9.3 
6.6 
6.5 




Change from preceding month 




Un- 
adjusted 


Sea- 
sonally 
adjusted 


Un- 
adjusted 


Sea- 
sonally 
adjusted 


Un- 
adjusted 


Sea- 
sonally 
adjusted 


Un- 
adj usted 


Sea- 
sonally 
adjusted 


Un- 
adjusted 


Sea- 
sonally 
adjusted 


1977: Jan.. 
Feb.. 
Mar. 
Apr.. 
May. 
June. 

July. 
Aug . 
Sept. 
Oct.. 
Nov. 
Oec.. 

1978: Jan.. 
Feb.. 
Mar. 
Apr.. 
May. 
June. 

July. 
Aug. 
Sept. 
Oct.. 
Nov. 


0.6 
1.0 
.6 
.8 
.6 
.7 

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

.6 
.6 
.7 
.9 
.9 
1.0 

.7 
.6 
.8 
.8 
.5 



1 


8 

6 
8 
6 
5 

3 

8 
6 
8 
9 
9 
9 

5 
6 
8 
8 
5 


0.9 
2.3 

.5 
1.2 

.4 
1.0 

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

1.5 
1.4 
1.1 
1.6 
1.3 
1.7 

.6 
.2 
.1 
.6 
.5 


0.8 
2.1 
.6 
1.5 

.6 
.6 

-.2 
.4 
.2 
.2 
.5 
.4 

1.3 
1.2 
1.3 
1.9 
1.5 
1.3 

.0 
.3 
.5 
.8 
.3 


0.0 
.6 
.6 
.6 
.7 
.4 

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

.1 
.1 
.7 
.8 
1.0 
.8 

.6 
.5 
.9 
.7 
.7 


0.7 
.6 
.4 
.4 
.3 
.3 

.2 
.2 
.3 
.4 
.5 
.5 

.7 
.2 
.6 
.5 
.6 
.6 

.6 
.5 
.9 
.7 
.8 


0.9 
.7 
.7 
.6 
.5 
.8 

.8 
.5 
.7 
.4 
.5 
.5 

.7 
.7 
.7 
.8 
.7 
.9 

.9 
.8 
1.0 
.9 
.5 


0.9 
.6 
.8 
.7 
.8 
.7 

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

.6 
.7 
.8 
.9 
1.0 
.9 

.8 
.8 
.8 
.8 
.4 


0.4 
.6 
.6 
.6 
.6 
.6 

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

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

.7 
.7 
.9 
.8 
.6 


0.8 
.6 

.6 
.6 
.5 
.5 

.4 
.4 
.4 
.3 
.4 
.4 

.8 
.5 
.7 
.7 
.8 
.7 

.7 
.7 
.8 
.8 
.6 



> Changes from December to December are based on unadjusted indexes. 

Note.— Beginning January 1978 data are for all urban consumers; earlier data are for urban wage earners and clerical 
workers. 

Source: Department of Labor, Bureau of Labor Statistics. 

244 



Table B-55. — Producer price indexes by stage of processing, 1947-78 
[1967=100] 





Finished goods 




Total 

finished 

goods 


Consumer foods 


Finished goods 


excluding 


consume 


foods 


Total 
con- 
sumer 
finished 
goods 


Year or month 


Total 


Consumer goods 


Capital 
equip- 
ment 1 




Total 


Crude 


Pro- 
cessed 


Total 


Durable 


Nondur 
able 


1947 


74.0 
79.9 
77.6 

79.0 
86.5 
86.0 
85.1 
85.3 

85.5 
87.9 
91.1 
93.2 
93.0 

93.7 

93.7 
94.0 
93.7 
94.1 

95.7 

98.8 
100.0 
102.9 
106.6 

110.3 
113.7 
117.2 
127.9 
147.5 

163.4 
170.3 
180.6 
194.6 

175.1 
176.6 
177.5 
178.8 
180.3 
180.5 

181.3 
181.3 
181.9 
183.9 
184.6 
185.5 

187.0 
188.5 
189.1 
191.5 
193.1 
194.5 

196.0 
195.6 
196.9 
199.7 
200.6 
202.4 


82.8 
90.4 
83.1 

84.7 
95.2 
94.3 
89.4 
88.7 

86.5 
86.3 
89.3 
94.5 
90.1 

92.1 
91.7 
92.5 
91.4 
91.9 

95.4 
101.6 
100 
103.7 
110.0 

113.5 
115.3 
121.7 
146.4 
166.9 

181.0 
180.2 
189.1 
206.8 

181.5 
185.0 
186.6 
188.5 
192.3 
190.7 

192.1 
189.9 
190.0 
189.9 
190.6 
192.9 

195.0 
199.6 
200.2 
204.5 
206.8 
209.5 

210.4 
205.9 
209.4 
212.5 
212.0 
215.8 


99.4 
107.1 
101.3 

92.2 
105.9 
112.8 
105.2 

94.7 

98.8 
98.7 
97.4 
103.5 
94.3 

100.6 
96.1 
97.0 
95.5 
98.2 

98.6 
104.8 
100.0 
107.5 
116.0 

116.3 
115.8 
121.2 
160.7 
180.8 

181.2 
194.8 
201.8 
216.5 

220.0 
229.1 
223.6 
213.1 
200.0 
184.2 

192.5 
191.2 
193.4 
189.9 
196.2 
188.6 

197.9 
210.2 
207.5 
220.2 
212.0 
211.7 

234.1 
212.8 
214.8 
220.1 
227.2 
230.0 


80.2 
87.6 
80.1 

83.4 
93.2 
91.3 
86.7 
87.6 

84.4 
84.3 
87.9 
93.1 
89.5 

90.7 
90.9 
91.7 
90.7 
90.8 

94.9 
101.0 
100.0 
103.0 
108.9 

113.1 
115.1 
121.7 
143.9 
164.6 

181.3 
177.4 
186.4 
204.1 

176.9 
179.9 
182.0 
184.9 
189.9 
189.4 

190.2 
188.1 
188.0 
188.1 
188.4 
191.5 

192.9 
196.9 
197.8 
201.4 
204.4 
207.3 

206.6 

203.4 

207.1 

209.9 

208.9 1 

212.7 


100.0 
102.6 
105.4 

109.1 
113.1 
115.4 
120.1 
139.3 

156.2 
165.5 
176.2 
188.9 

171.4 
172.2 
173.0 
174.0 
174.8 
175.6 

176.1 
176.8 
177.6 
180.3 
180.9 
181.4 

182.7 
183.2 
183.8 
185.6 
186.9 
188.0 

189.6 
190.4 
191.1 
193.8 
195.1 
196.2 


79.0 
84.0 
82.2 

83.5 
89.5 
88.3 
89.1 
89.4 

90.1 
92.3 
94.6 
94.7 
95.9 

96.3 
96.2 
96.0 
96.0 
95.9 

96.6 
98.1 
100.0 
102.1 
104.6 

107.7 
111.4 
113.4 
118.5 
138.6 

153.1 
161.8 
172.1 
183.7 

167.4 
168.3 
169.2 
170.4 
171.1 
172.0 

172.5 
173.0 
173.7 
175.5 
175.8 
176.2 

177.4 
177.8 
178.3 
180.5 
181.9 
182.9 

184.8 
185.6 
186.0 
188.6 
189.5 
190.8 


74.6 
79.7 
81.8 

82.7 
88.2 
88.9 
89.6 
90.3 

91.2 
94.3 
97.1 
98.4 
99.6 

99.2 
98.8 
98.3 
97.8 
98.2 

97.9 
98.5 
100.0 
102.2 
104.0 

106.9 
110.8 
113.2 
115.8 
126.3 

138.2 
144.4 
152.2 
165.9 

149.0 
149.3 
149.7 
150.6 
150.8 
151.4 

151.5 
152.2 
152.2 
156.1 
156.4 
156.9 

158.5 
158.3 
159.0 
163.2 
165.0 
165.3 

167.7 
168.4 
168.3 
171.7 
172.1 
172.8 


80.7 
85.8 
82.3 

83.6 
90.0 
87.8 
88.6 
88.9 

89.4 
91.1 
93.2 
92.6 
94.0 

94.7 
94.7 
94.8 
95.1 
94.8 

95.9 
97.8 
100.0 
102.2 
105.0 

108.3 
111.7 
113.6 
120.5 
146.8 

163.0 
173.3 
185.4 
195.4 

179.6 
181.0 
182.3 
183.6 
184.8 
185.9 

186.6 
187.0 
188.1 
188.5 
188.8 
189.1 

189.9 
190.7 
191.1 
191.8 
192.9 
194.4 

195.9 
196.9 
197.7 
199.6 
200.9 
202.6 


55.4 
60.4 
63.4 

64.9 
71.2 
72.4 
73.6 
74.5 

76.7 
82.4 
87.5 
89.8 
91.5 

91.7 
91.8 
92.2 
92.4 
93.3 

94.4 
96.8 
100.0 
103.5 
106.9 

112.0 
116.6 
119.5 
123.5 
141.0 

162.5 
173.2 
184.5 
199.0 

179.6 
180.2 
180.7 
181.6 
182.4 
183.1 

183.8 
184.8 
185.6 
189.8 
190.8 
191.6 

193.0 
193.7 
194.6 
195.6 
196.9 
198.1 

199.2 
200.0 
201.0 
204.1 
205.9 
206.9 


80.5 


1948 


86.5 


1949 


82.5 


1950 


83.9 


1951 


91.8 


1952 


90.7 


1953 


89.2 


1954 


89.1 


1955 

1956 


88.5 
89.8 


1957 


92.4 


1958 

1959 

1960 


94.4 
93.6 

94.5 


1961 


94.3 


1962 


94.6 


1963 


94.1 


1964 

1965 


94.3 
96.1 


1966 


99.4 


1967 


100.0 


1968 


102.7 


1969 


106.6 


1970 


109.9 


1971 


112.9 


1972 


116.6 


1973 


129.2 


1974... 


149.3 


1975 


163.6 


1976 


169.0 


1977.... 


178.9 


1978 


192.6 


1977: Jan 


173.2 


Feb 


175.0 


Mar 


176.1 


Apr 


177.5 


May 


179.4 


June 


179.4 


July 


180.2 


Aug 


179.8 


Sept 


180.3 


Oct 


181.4 


Nov 


181.9 


Dec 


183.0 


1978: Jan 


184.4 


Feb.. 


186.2 


Mar 


186.8 


Apr. 


189.7 


May 


191.4 


June 


193.0 


July 


194.6 


Aug 


193.6 


Sept... 

Oct. 


195.1 
197.8 


Nov 


198.3 


Dec 


200.3 







See next page for continuation of table. 



245 



Table B-55. — Producer price indexes by stage of processing, 1947-78 — Continued 

[1967 = 1001 



Year or month 



1947 

1948 

1949 

1950 

1951 

1952 

1953 

1954 

1955 

1956 

1957 

1958 

1959 

1960 

1961 

1962 

1963 

1964 

1965 

1966 

1967 

1968 

1969 

1970. 

1971 

1972 

1973 

1974 

1975. 

1976... 

1977 

1978 

1977: Jan 

Feb 

Mar 

Apr 

May 

June 

July 

Aug 

Sept. 
Oct.. 
Nov.. 
Dec. 



1978: Jan.... 
Feb.... 

Mar 

Apr 

May 

June.... 



July... 
Aug... 
Sept... 
Oct.... 
Nov... 
Dec... 



Intermediate materials, supplies, and components 



Total 



72.4 
78.3 
75.2 

78.6 
88.1 
85.5 
86.0 
86.5 

88.1 
92.0 
94.1 
94.3 
95.6 

95.6 
95.0 
94.9 
95.2 
95.5 

96.8 
99.2 
100.0 
102.3 
105.8 

109.9 
114.1 
118.7 
131.6 
162.9 

180.0 
189.3 
201.7 
215.5 

195.0 
196.6 
198.7 
201.2 
202.1 
202.1 

202.6 
203.4 
204.2 
204.4 
204.9 
205.4 

207.2 
208.9 
210.7 
212.5 
213.9 
215.1 

216.0 
217.3 
218.7 
220.7 
221.8 
222.8 



Foods 

and 

feeds 2 



100.0 
99.4 
102.7 

109.1 
111.7 
118.5 
168.4 
200.2 

195.3 
186.6 
191.0 
201.0 

192.3 
194.8 
198.3 
212.0 
211.0 
202.1 

182.9 
177.7 
174.6 
173.1 
186.2 
186.4 

189.6 
189.9 
197.9 
200.6 
200.8 
201.9 

201.5 
198.8 
203.4 
207.6 
207.4 
212.3 



Other 



70.0 
76.1 
74.2 

77.7 
87.0 
84.3 
85.3 
85.7 

88.3 
92.6 
95.0 
94.8 
96.4 

96.8 
95.5 
95.3 
95.0 
95.6 

96.9 
98.9 
100.0 
102.6 
106.1 

109.9 
114.3 
118.9 
128.1 
159.5 

178.6 
189.5 
202.4 
216.4 

195.3 
196.7 
198.7 
200.7 
201.6 
202.2 

203.8 
204.9 
206.0 
206.3 
206.0 
206.6 

208.2 
210.1 
211.5 
213.3 
214.7 
215.9 

216.8 
218.4 
219.6 
221.5 
222.7 
223.5 



Materials and 
components 



For 

manu- 
fac- 
turing 



72.1 
77.8 
74.5 

78.1 
88.5 
84.8 
86.2 
86.3 



92.6 
94.8 
95.2 
96.5 

96.5 
95.3 
94.7 
94.9 
95.9 

97.4 
99.3 
100.0 
102.2 
105.8 

110.0 
112.8 
117.0 
127.7 
162.2 

178.7 
185.6 
195.5 
208.2 

189.7 
190.8 
192.7 
194.6 
195.8 
195.5 

196.6 
197.3 
197.8 
198.0 
198.2 
198.9 

200.0 
202.1 
203.5 
205.5 
206.5 
207.4 

208.2 
210.1 
211.7 
213.8 
214.7 
215.4 



For 
con- 
struc- 
tion 



66.0 
73.1 
73.2 

77.0 
84.3 
83.7 
85.1 
85.5 

88.9 
93.5 
94.0 
94.0 
96.6 

95.9 
94.6 
94.2 
94.5 
95.4 

96.2 
98.8 
100.0 
104.9 
110.8 

112.6 
119.7 
126.2 
136.7 
161.6 

176.4 
188.0 
202.9 
224.4 

195.1 
195.9 
197.8 
199.4 
200.3 
201.3 

204.1 
206.1 
208.8 
208.5 
208.3 
209.5 

212.7 
216.3 
218.3 
220.8 
222.5 
224.3 

226.2 
228.3 
229.1 
230.2 
231.8 
232.5 



Proc- 
essed 
fuels 
and 

lubri- 
cants 



85.5 
96.9 
88.2 

89.9 
93.9 
92.8 
93.4 
93.3 

93.3 
96.3 
101.9 
96.0 
S.5.6 

98.2 
99.4 
99.0 
98.1 
96.0 

97.4 
99.2 
100.0 
97.7 
98.7 

105.0 
115.2 
118.9 
131.5 
199.1 

233.0 
250.8 
283.8 
296.4 

262.7 
271.2 
276.3 
282.0 
283.9 
286.1 

289.0 
291.9 
291.3 
292.4 
289.2 
289.3 

291.2 
291.7 
294.3 
294.8 
297.3 
299.9 

298.1 
296.7 
296.7 
297.9 
297.9 
299.9 



Con- 
tain- 
ers 



66.8 
69.8 
70.1 

72.0 
84.5 
79.9 
80.0 
81.5 

82.6 
88.6 
92.5 
94.7 
94.2 

95.5 
94.7 
95.9 
94.7 
94.0 

95.8 
98.4 
100.0 
102.4 
106.3 

111.4 
116.6 
121.9 
129.2 
152.2 

171.4 
181.5 
193.1 
212.4 

184.1 
184.3 
189.0 
193.3 
192.9 
193.5 

194.0 
194.4 
197.1 
198.1 
198.2 
198.2 

202.2 
204.3 
205.7 
206.6 
209.3 
211.7 

213.5 
214.6 
216.5 
220.7 
221.6 
222.4 



Sup- 
plies 



77.5 
81.0 
76.3 

78.9 



87.1 
88.0 
90.0 
91.2 

90.7 
91.8 
93.8 
95.2 
94.3 

95.2 
99.4 
100.0 
101.2 
102.8 

108.0 
111.0 
115.6 
140.6 
154.5 

168.1 
179.1 
188.0 
196.9 

186.6 
187.4 
188.5 
192.5 
191.9 
190.9 

185.9 
184.6 
185.2 
185.1 
189.0 
188.7 

190.5 
189.8 
192.7 
194.0 
195.1 
195.8 

197.1 
196.9 
198.9 
201.9 
203.5 
205.8 



Crude materials for further processing 



Total 



101.2 
110.9 
96.0 

104.6 
120.1 
110.3 
101.9 
101.0 

97.1 

97.6 
99.8 
102.0 
99.4 

97.0 
96.5 
97.5 
95.4 
94.5 

99.3 
105.7 
100.0 
101.6 
108.4 

112.3 
115.1 
127.6 

174.0 
196.1 

196.9 
205.1 
214.3 
240.2 

208.1 
215.5 
219.9 
226.1 
224.4 
215.4 

212.9 
207.7 
207.8 
207.6 
210.6 
215.5 

219.6 
225.0 
230.5 
239.0 
241.2 
245.4 

245.4 
240.2 
244.9 
249.9 
248.6 
252.4 



Food- 
stuffs 
and 
feed- 
stuffs 



111.7 
120.8 
100.3 

107.6 
124.5 
117.2 
104.9 
104.9 

95.1 
93.1 
97.2 
103.0 
96.2 

95.1 
93.8 
95.7 
92.9 
90.8 

97.1 
105.9 
100.0 
101.3 
109.3 

112.0 
114.2 
127.5 
180.0 
189.4 

191.8 
190.1 
190.9 
215.4 

189.7 
194.0 
197.1 
203.7 
201.8 
192.0 

191.2 
181.3 

182.0 
182.7 
185.5 
190.0 

194.0 
201.3 
206.3 
216.3 
219.1 
223.7 

222.0 
213.2 
218.5 
224.4 
221.3 
224.7 



Other 



Total 



100.0 
102.2 
106.8 

112.7 
117.0 
128.0 
162.5 
208.9 

206.9 
233.6 
258.4 
287.0 

242.9 
256.0 
263.0 
268.5 
267.3 
259.5 

253.9 
257.4 
256.4 
254.6 
257.9 
263.7 

267.8 
269.7 
276.2 
281.6 
282.6 
286.1 

289.7 
291.6 
294.9 
298.2 
300.6 
305.1 



Fuel 



66.6 
78.7 
78.3 

77.9 
79.4 
79.9 
82.7 
79.0 

78.8 
84.4 
89.2 
90.3 
91.9 

92.8 
92.6 
92.1 
93.2 
92.8 

93.5 
96.3 
100.0 
102.3 
106.6 

122.6 
139.0 
148.7 
164.5 
219.4 

271.5 

314.7 
400.4 
464.0 

342.8 
377.8 
383.9 
392.3 

404.5 
399.4 

403.2 
412.3 
415.4 
416.2 
424.5 
432.0 

430.3 
431.7 
441.9 
454.7 
458.3 
465.8 

471.8 
470.8 
478.6 
483.5 
485.3 
494.9 



1 Formerly called producer finished goods. 

2 Intermediate materials for food manufacturing and manufactured animal feeds. 

Source: Department of Labor, Bureau of Labor Statistics. 



246 



Table B-56. — Proiucrr price indexes by stage of processing, seasonally adjusted, 1975-78 
[1967 = 100, seasonally adjusted] 





Finished goods 


Intermediate materi- 










Total 
fin- 
ished 
goods 


Con- 
sum- 
er 
fin- 
ished 
foods 


Finished goods excluding consumer 
foods 


Total 
con- 
sumer 
fin- 
ished 
goods 


- als, supplies, and 
components 


further processing 


month 


Total 


Consumer goods 


Capi- 
tal 
equip- 
ment 1 


Total 


Foods 

and 

feeds' 


Other 


Total 


Food- 
stuffs 

and 

feed- 
stuffs 






Total 


Dur- 
able 


Non- 
dura- 
ble 


Other 


1975: Jan.... 
Feb.... 
Mar.... 

Apr 

May... 
June... 

July... 
Aug.... 
Sept... 
Oct..- 
Nov.... 
Dec 

1976: Jan. 

Feb.... 

Mar 

Apr 

May... 
June... 

July... 
Aug.... 
Sept... 
Oct.... 
Nov.... 
Dec 

1977: Jan.... 
Feb.... 

Mar 

Apr 

May... 
June... 

July... 
Aug... 
Sept... 
Oct.... 
Nov... 
Dec... 

1978: Jan.... 
Feb.... 
Mar... 

Apr 

May... 
June... 

July... 
Aug... 
Sept... 
Oct.... 
Nov... 
Dec... 


158.6 
158.8 
159.0 
160.1 
161.4 
162.8 

164.2 
165.0 
166.3 
167.5 
168.1 
168.2 

168.4 
168.2 
168.3 
169.4 
169.6 
170.0 

170.3 
170.0 
171.0 
171.5 
172.2 
173.8 

174.8 
176.6 
178.0 
179.2 
180.6 
180.8 

181.1 
181.5 
182.1 
183.2 
184.5 
185.3 

186.6 
188.6 
189.6 
192.0 
193.4 
194.8 

195.8 
195.8 
197.2 
198.9 
200.4 
202.1 


175.6 
174.6 
173.1 
175.3 
178.2 
181.1 

183.7 
183.9 
186.0 
187.1 
186.6 
185.2 

183.3 
180.8 
180.1 
183.1 
183.4 
182.0 

180.3 
177.1 
177.4 
176.5 

177.0 
180.7 

181.3 
185.9 
188.3 
189.6 
192.2 
190.3 

189.9 
189.3 
189.2 
189.5 
191.9 
192.6 

194.8 
200.7 
202.1 
205.8 
206.7 
209.1 

208.1 
205.2 
208.6 
212.1 
213.4 
215.4 


151.6 
152.4 
153.3 
153.9 
154.5 
155.2 

156.1 
157.1 
158.2 
159.4 
160.5 
161.3 

162.0 
162.6 
163.0 
163.4 
163.6 
164.6 

165.5 
166.2 
167.3 
168.3 
169.0 
169.9 

171.0 
172.0 
173.0 
174.3 
175.2 
176.0 

176.5 
177.2 
178.2 
179.5 
180.3 
181.2 

182.2 
183.0 
183.9 
185.8 
187.3 
188.4 

190.0 
190.8 
191.7 
192.9 
194.5 
196.0 


149.1 
149.7 
150.2 
150.6 
151.1 
152.0 

152.9 
154.2 
155.2 
156.4 
157.4 
158.3 

158.8 
159.2 
159.3 
159.5 
159.6 
160.6 

161.6 
162.5 
163.7 
164.2 
165.2 
165.6 

167.2 
168.1 
169.2 
170.7 
171.5 
172.4 

172.6 
173.2 
174.1 
174.8 
175.4 
176.1 

177.1 
177.6 
178.4 
180.8 
182.3 
183.2 

185.0 
185.9 
186.6 
187.8 
189.1 
190.7 


135.0 
135.8 
136.6 
136.9 
137.1 
137.6 

138.0 
138.6 
139.2 
140. 1 
141.1 
141.5 

142.0 
142.5 
142.8 
143.0 
143.3 
144.0 

144.3 
144.9 
146.0 
146.0 
146.6 
146.9 

148.0 
148.7 
149.4 
150.6 
151.3 
151.9 

152.4 
153.7 
154.0 
154.9 
155.5 
156.1 

157.4 
157.7 
158.7 
163.2 
165.5 
165.8 

168.7 
170.1 
170.3 
170.3 
171.1 
171.9 


158.4 
158.8 
159.1 
159.7 
160.4 
161.4 

162.7 
164.4 
165.8 
167.0 
168.2 
169.2 

170.1 
170.3 
170.2 
170.4 
170.6 
172.0 

173.3 
174.4 
175.5 
176.3 
177.6 
178.2 

180.0 
181.2 
182.7 
184.2 
185.2 
186.1 

186.2 
186.3 
187.5 
188.1 
188.8 
189.5 

190.3 
190.9 
191.5 
192.4 
193.3 
194.6 

195.5 
196.1 
197.1 
199.2 
200.9 
203.0 


156.9 
158.2 
159.7 
160.7 
161.4 
162.0 

162.9 
163.3 
164.5 
165.9 
166.8 
167.7 

168.8 
169.7 
170.5 
171.2 
171.7 
172.5 

173.3 
173.7 
174.9 
176.5 
177.0 
178.5 

178.9 
179.9 
1E0. 7 
181.7 
182.8 
183.7 

184.5 
185.4 
186.4 
188.9 
189.9 
191.3 

192.3 
193.5 
194.6 
195.7 
197.3 
198.7 

199.9 
200.7 
201.8 
203.0 
205.0 
206.6 


159.1 
158.9 
158.7 
159.9 
161.3 
162.9 

164.5 
165.3 
166.8 
167.9 
168.4 
168.3 

168.0 
167.5 
167.4 
168.5 
168.6 
168.9 

168.9 
168.4 
169.3 
169.3 
170.2 
171.8 

173.0 
175.2 
176.8 
178.1 
179.6 
179.5 

179.5 
179.7 
180.3 
180.8 
182.1 
182.7 

184.2 
186.4 
187.5 
190.4 
191.6 
193.1 

194.0 
193.6 
195.1 
197.1 
198.5 
200.2 


179.5 
179.2 
178.4 
178.8 
178.3 
177.8 

178.9 
180.0 
180.4 
182.3 
182.8 
183.2 

184.3 
185.2 
186.0 
186.6 

187.3 
188.4 

190.0 
190.1 
191.7 
192.4 
193.4 
194.4 

195.7 
197.3 
199.3 
201.1 
202.0 
201.6 

202.2 
202.6 
203.5 
204.3 
205.2 
206.0 

207.9 
209.7 
211.3 
212.4 
213.7 
214.6 

215.5 

216.4 
217.9 
220.6 
222.2 
223.5 


218.7 
209.1 
197.4 
198.9 
192.0 
184.4 

193.4 
195.8 
192.4 
192.3 
186.6 
180.5 

180.7 
181.2 
183.1 
180.5 
188.5 
193.2 

202.4 
184.1 
188.7 
184.9 
184.6 
187.0 

189.7 
196.2 
201.9 
212.5 
216.9 
199.9 

185.3 
176.2 
172.9 
172.8 
185.4 
183.3 

187.2 
191.0 
201.1 
201.2 
206.4 
200.8 

204.0 
197.1 
201.5 
207.1 
206.4 
208.8 


175.9 
176.4 
176.6 
177.0 
177.2 
177.3 

177.6 
178.6 
179.3 
181.4 
182.5 
183.5 

184.7 
185.6 
186.3 
187.1 
187.2 
188.3 

189.4 
190.4 
192.0 
192.9 
193.9 
194.9 

196.2 
197.5 
199.1 
200.5 
201.2 
201.8 

203.2 
204.2 
205.3 
206.1 
206.4 
207.4 

209.2 
210.9 
212.0 
213.1 
214.2 
215.4 

216.2 
217.6 
218.9 
221.4 
223.2 
224.4 


190.4 
187.4 
182.2 
189.9 
196.0 
195.2 

199.6 
201.6 
204.3 
206.7 
204.8 
203.2 

203.1 
202.3 
199.6 
205.2 
204.1 
208.2 

208.6 
204.2 
203.7 
203.6 
208.6 
209.5 

210.2 
219.0 
221.0 
222.5 
222.3 
213.4 

209.8 
206.3 
205.7 
207.4 
214.4 
217.2 

221.6 
228.7 
231.7 
238.5 
238.9 
243.1 

241.7 
238.6 
242.3 
249.6 
253.3 
254.4 


183.5 
179.1 
172.6 
183.7 
191.1 
190.0 

196.4 
199.3 
200.9 
204.2 
201.4 
196.5 

195.3 
194.6 
188.2 
195.7 
193.1 
195.6 

190.8 
187.1 
186.0 
181.6 
183.4 
188.3 

192.0 
198.2 
198.7 
204.3 
200.0 
189.9 

185.8 
180.2 
179.8 
182.2 
189.9 
191.1 

196.4 
205.6 
208.0 
217.0 
217.1 
221.3 

215.7 
211.9 
215.9 
223.7 
226.5 
226.1 


203.5 
203.9 
200.8 
201.7 
205.4 
205.5 

205.9 
206.6 
210.8 
211.5 
211.1 
215.8 

218.2 
216.6 
220.0 
223.4 
224.9 
232.2 

242.8 
236.7 
236.9 
245.5 
255.9 
248.8 

244.6 
258.8 
263.4 
265.5 
264.1 
257.9 

255.4 
255.6 
254.4 
254.9 
260.9 
266.3 

269.4 
272.1 
276.5 
278.8 
279.8 
284.2 

291.0 
289.5 
292.5 
298.6 
304.1 
308.1 



1 Formerly called producer finished goods. 

2 Intermediate materials for food manufacturing and manufactured animal feeds. 

Source: Department of Labor, Bureau of Labor Statistics. 



247 



Table B-57. — Producer price indexes by major commodity groups, 1929-78 

11967 = 100] 



Year or month 



1929. 

1933. 

1939. 

1940. 
1941. 
1942. 
1943. 
1944. 
1945. 
1946. 
1947. 
1948. 
1949. 

1950. 
1951. 
1952. 
1953. 
1954. 
1955. 
1956. 
1957. 
1958. 
1959. 



I960.. 
1961.. 
1962.. 
1963.. 
1964.. 
1965.. 
1966.. 
1967.. 
1968.. 
1969.. 



1970. 
1971. 
1972. 
1973. 
1974. 
1975. 
1976. 
1977. 
1978. 



1977: Jan.. 
Feb.. 
Mar.. 
Apr.. 
May. 
June. 

July. 
Aug.. 
Sept. 
Oct_. 
Nov.. 
Dec. 



1978: Jan.. 
Feb.. 
Mar.. 
Apr.. 
May.. 
June. 

July.. 

Aug.. 
Sept. 
Oct.. 
Nov. 
Dec_ 



Farm products and processed 
foods and feeds 



Total 



94.3 
101.5 
89.6 

93.9 
106.9 
102.7 
96.0 
95.7 
91.2 
90.6 
93.7 
98.1 
93.5 

93.7 
93.7 

94.7 
93.8 
93.2 
97.1 
103.5 
100.0 
102.4 
108.0 

111.7 
113.9 
122.4 
159.1 
177.4 
184.2 
183.1 
188.8 
206.7 

184.8 
188.4 
190.9 
195.9 
196.8 
191.5 

188.7 
184.3 
184.0 
184.0 
187.0 
189.4 

192.2 
196.8 
200.0 
205.5 
207.6 
210.4 

210.3 
205.3 
209.5 
213.6 
212.5 
216.1 



Farm 
products 



64.1 

31.4 

40.0 

41.4 
50.3 
64.8 
75.0 
75.5 
78.5 
90.9 
109.4 
117.5 
101.6 

106.7 
124.2 
117.2 
106.2 
104.7 
98.2 
96.9 
99.5 
103.9 
97.5 

97.2 
96.3 
98.0 
96.0 
94.6 
98.7 
105.9 
100.0 
102.5 
109.1 

111.0 
112.9 
125.0 
176.3 
187.7 
186.7 
191.0 
192.5 
212.7 

193.5 
199.1 
202.5 
208.2 
204.3 
192.8 

190.2 
181.8 
182.0 
182.0 
185.6 
188.3 

192.2 
198.9 
204.2 
213.7 
215.8 
219.5 

219.9 
210.3 
215.3 
220.7 
219.2 
222.4 



Proc- 
essed 
foods 
and 
feeds 



82.9 
88.7 
80.6 

83.4 
92.7 
91.6 
87.4 
88.9 
85.0 
84.9 
87.4 
91.8 
89.4 

89.5 
91.0 
91.9 
92.5 
92.3 
95.5 
101.2 
100.0 
102.2 
107.3 

112.1 

114.5 
120.8 
148.1 
170.9 
182.6 
178.0 
186.1 
202.6 

179.3 
181.9 
183.9 
188.5 
191.9 
190.1 

187.2 
184.9 
184.4 
184.3 
186.9 
189.3 

191.5 
194.9 
196.9 
200.2 
202.4 
204.6 

204.2 
201.8 
205.5 
209.0 
208.1 
211.9 



Industrial commodities 



Total 



48.6 

37.8 

43.3 

44.0 
47.3 
50.7 
51.5 
52.3 
53.0 
58.0 
70.8 
76.9 
75.3 

78.0 
86.1 
84.1 
84.8 
85.0 
86.9 
90.8 
93.3 
93.6 
95.3 

95.3 
94.8 
94.8 
94.7 
95.2 
96.4 
98.5 
100.0 
102.5 
106.0 

110.0 
114.1 
117.9 
125.9 
153.8 
171.5 
182.4 
195.1 
209.4 

188.4 
190.0 
191.7 
193.3 
194.2 
194.7 

195.9 
196.9 
197.8 
199.1 
199.3 
200.0 

201.6 
202.9 
204.1 
206.1 
207.4 
208.7 

210.1 
211.4 
212.4 
214.7 
216.0 
217.0 



Textile 
products 

and 
apparel 



103.6 
108.1 
98.9 

102.7 
114.6 
103.4 
100.8 
98.6 
98.7 
98.7 
98.8 
97.0 
98.4 

99.5 
97.7 
98.6 
98.5 
99.2 
99.8 
100.1 
100.0 
103.7 
106.0 

107.1 
109.0 
113.6 
123.8 
139.1 
137.9 
148.2 
154.0 
159.7 

150.8 
151.7 
152.4 
153.7 
154.0 
154.6 

154.5 
154.6 
155.1 
155.2 
155.3 
155.8 

156.5 
157.0 
157.4 
157.9 
158.6 
159.2 

160.0 
160.5 
161.1 
162.2 
163.0 
163.5 



Hides, 
skins, 
leather, 

and 
related 
products 



48.9 

36.3 

42.8 

45.2 
48.4 
52.8 
52.7 
52.2 
52.9 
61.1 
83.3 
84.2 
79.9 

86.3 
99.1 
80.1 
81.3 
77.6 
77.3 
81.9 
82.0 
82.9 
94.2 

90.8 
91.7 
92.7 
90.0 
90.3 
94.3 
103.4 
100.0 
103.2 
108.9 

110.3 
114.1 
131.3 
143.1 
145.1 
148.5 
167.8 
179.3 
200.1 

175.3 
176.9 
177.9 
179.9 
181.9 
179.4 

180.0 
180.2 
179.6 
179.2 
180.0 
181.5 

185.8 
187.2 
187.9 
191.9 
193.6 
195.3 

197.3 
205.1 
211.0 
213.3 
216.0 
216.5 



Fuels 

and 
related 
products, 

and 
power 1 



59.4 

47.6 

52.3 

51.4 
54.6 
56.2 
57.8 
59.5 
60.1 
64.4 
76.9 
90.5 
86.2 

87.1 
90.3 
90.1 
92.6 
91.3 
91.2 
94.0 
99.1 
95.3 
95.3 

96.1 
97.2 
96.7 
96.3 
93.7 
95.5 
97.8 

100.0 
98.9 

100.9 

106.2 
115.2 
118.6 
134.3 
208.3 
245.1 
265.6 
302.2 
322.5 

278.8 
289.1 
293.7 
298.8 
302.4 
304.3 

307.0 
309.5 
309.9 
310.7 
310.5 
312.0 

312.8 
312.9 
315.3 
317.3 
319.7 
323.2 

324.5 
324.9 
327.0 
328.9 
329.9 
334.1 



Chemicals 
and allied 
products 1 



47.4 

51.5 

52.4 
57.0 
63.3 
64.1 
64.8 
65.2 
70.5 
93.7 
95.9 
87.6 

88.9 
101.7 
96.5 
97.7 
98.9 
98.5 
99.1 
101.2 
102.0 
101.6 

101.8 
100.7 
99.1 
97.9 
98.3 
99.0 
99.4 
100.0 
99.8 
99.9 

102.2 
104.1 
104.2 
110.0 
146.8 
181.3 
187.2 
192.8 
198.7 

188.9 
190.1 
191.2 
192.9 
194.0 
193.9 

193.6 
193.6 
193.2 
193.7 
193.9 
194.1 

194.1 
195.2 
196.1 
196.9 
198.6 
198.9 

199.8 
199.5 
200.2 
201.5 
202.3 
202.2 



See next page for continuation of table. 



248 



Table B-57. — Producer price indexes by major commodity groups, 1929-78 — Continued 

11967=100] 



Year or month 



Industrial commodities — Continued 



Rubber 

and 

plastic 

products 



Lumber 

and 

wood 

products 



Pulp, 

paper, 

and 

allied 

products 



Metals 

and 

metal 

products 



Machin- 
ery and 
equip- 
ment 



Furni- 
ture and 
house- 
hold 
durables 



Nonme- 

tallic 

mineral 

products 



Trans- 
portation 
equip- 
ment: 
Motor 
vehicles 

and 
equip- 
ment 2 



Miscel- 
laneous 
products 



59.4 

40.2 

61.2 

57.1 
61.5 
71.6 
73.6 
72.7 
70.5 
70.8 
70.5 
72.8 
70.5 

85.9 
105.4 
95.5 
89.1 
90.4 
102.4 
103.8 
103.4 
103.3 
102.9 

103.1 
99.2 
96.3 
96.8 
95.5 
95.9 
97.8 
100.0 
103.4 
105.3 

108.3 
109.1 
109.3 
112.4 
136.2 
150.2 
159.2 
167.6 
174.7 

164.6 
164.2 
164.6 
165.7 
166.3 
167.5 

168.9 
169.3 
169.5 
170.2 
170.2 
170.0 

170.2 
170.2 
171.4 
172.8 
173.8 
174.5 

174.9 
175.7 
176.6 
178.0 
179.2 
179.6 



25.0 

19.0 

24.8 

27.4 
32.7 
35.6 
37.7 
40.6 
41.2 
47.2 
73.4 
84.0 
77.7 

89.3 
97.2 
94.4 
94.3 
92.6 
97.1 
98.5 
93.5 
92.4 
98.8 

95.3 
91.0 
91.6 
93.5 
95.4 
95.9 
100.2 
100.0 
113.3 
125.3 

113.6 
127.3 
144.3 
177.2 
183.6 
176.9 
205.6 
236.3 
275.9 

222.8 
224.4 
229.0 
229.8 
229.5 
228.8 

235.6 
242.7 
252.9 
247.8 
243.3 
249.2 

256.4 
263.7 
266.2 
269.6 
273.4 
278.5 

277.5 
281.6 
282.8 
284.1 
288.5 
288.7 



72.5 
75.7 
72.4 

74.3 
88.0 
85.7 
85.5 
85.5 
87.8 
93.6 
95.4 
96.4 
97.3 

98.1 
95.2 
96.3 
95.6 
95.4 
96.2 
98.8 
100.0 
101.1 
104.0 

108.2 
110.1 
113.4 
122.1 
151.7 
170.4 
179.4 
186.4 
195.5 

182.9 
183.0 
183.6 
185.3 
186.2 
187.3 

187.8 
187.8 
188.1 
188.7 
188.2 
187.6 

188.0 
188.6 
189.7 
191.9 
193.2 
193.5 

195.5 
195.8 
199.1 
202.2 
203.7 
204.9 



40.2 

30.7 

37.6 

37.8 
38.5 
39.1 
39.0 
39.0 
39.6 
44.3 
54.9 
62.5 
63.0 

66.3 
73.8 
73.9 
76.3 
76.9 
82.1 
89.2 
91.0 
90.4 
92.3 

92.4 
91.9 
91.2 
91.3 
93.8 
96.4 
98.8 
100.0 
102.6 
108.5 

116.6 
118.7 
123.5 
132.8 
171.9 
185.6 
195.9 
209.0 
227.1 

202.1 

203.2 
206.5 
208.2 
208.5 
207.7 

210.6 
211.7 
212.6 
211.8 
212.0 
213.3 

215.2 
219.1 
221.1 
223.9 
224.6 
225.9 

227.3 
231.0 
231.5 
234.0 
235.4 
236.6 



41.3 

41.4 
42.1 
42.8 
42.4 
42.1 
42.2 
46.4 
53.7 
58.2 
61.0 

63.1 

70.5 
70.6 
72.2 
73.4 
75.7 
81.8 
87.6 
89.4 
91.3 

92.0 
91.9 
92.0 
92.2 
92.8 
93.9 
96.8 
100.0 
103.2 
106.5 

111.4 
115.5 
117.9 
121.7 
139.4 
161.4 
171.0 
181.7 
196.0 

176.7 
177.5 
178.2 
178.9 
180.0 
180.7 

181.8 
182.8 
183.8 
185.6 
186.8 
187.5 

189.3 
190.3 
191.6 
192.7 
193.9 
195.3 

196.5 
197.5 
198.7 
200.4 
202.5 
203.6 



55.8 

44.6 

52.6 

53.8 
57.2 
61.8 
61.4 
63.1 
63.2 
67.1 
77.0 
81.6 
82.9 

84.7 
91.8 
90.1 
91.9 
92.9 
93.3 
95.8 
98.3 
99.1 
99.3 

99.0 
98.4 
97.7 
97.0 
97.4 
96.9 
98.0 
100.0 
102.8 
104.9 

107.5 
110.0 
111.4 
115.2 
127.9 
139.7 
145.6 
151.5 
160.1 

148.8 
149.1 
149.6 
150.1 
150.6 
151.5 

151.4 
152.6 
152.7 
153.0 
153.8 
154.2 

156.5 
156.7 
157.7 
158.4 
159.2 
159.5 

161.4 
161.8 
161.3 
162.2 
162.9 
163.7 



51.2 

47.2 

49.1 

49.1 
50.2 
52.3 
52.4 
53.5 
55.7 
59.3 
66.3 
71.6 
73.5 

75.4 
80.1 
80.1 
83.3 
85.1 
87.5 
91.3 
94.8 
95.8 
97.0 

97.2 
97.6 
97.6 
97.1 
97.3 
97.5 
98.4 
100.0 
103.7 
107.7 

112.9 
122.4 
126.1 
130.2 
153.2 
174.0 
186.3 
200.5 
222.8 

192.4 
193.6 
195.1 
198.6 
199.3 
200.6 

201.7 
202.5 
204.3 
205.4 
205.7 
206.6 

212.9 
215.1 
215.9 
218.4 
219.3 
222.0 

224.7 
227.2 
227.8 
229.0 
229.8 
230.9 



41.9 

34.8 

39.1 

40.4 
43.2 
47.2 
47.2 
47.5 
48.3 
56.0 
64.1 
70.8 
75.7 

75.3 
79.4 
84.0 
83.6 
83.8 
86.3 
91.2 
95.1 
98.1 
100.3 

98.8 
98.6 
98.6 
97.8 
98.3 
98.5 
98.6 
100.0 
102.8 
104.8 

108.7 
114.9 
118.0 
119.2 
129.2 
144.6 
153.8 
163.7 
175.9 

159.2 
159.4 
160.7 
161.0 
161.4 
161.9 

161.9 
163.2 
163.9 
170.7 
170.7 
170.9 

171.3 
171.8 
171.9 
172.9 
174.6 
175.0 

175.5 
175.8 
175.8 
181.3 
182.1 
182.5 



1 Prices for some items in this grouping are lagged and refer to 1 month earlier than the index month. 

2 Index for total transportation equipment is not shown but is available beginning December 1968. 

Source: Department of Labor, Bureau of Labor Statistics. 



249 



Table B-58. — Changes in producer price indexes for finished goods, 1948-78 
(Percent change] 





Total 

finished 

goods 


Consumer 


Finished goods excluding consumer foods 


Year or month 


finished 
foods 


Total 


Consumer 
goods 


Capital 
equipment 




Dec. 

to 

Dec. 1 


Year 
to 
year 


Dec. 

to 

Dec. 1 


Year 

to 

year 


Dec. 

to 

Dec. 1 


Year 
to 
year 


Dec. 

to 

Dec.» 


Year 
to 

year 


Dec. 

to 

Dec. 1 


Year 
to 

year 


1948 


3.0 
-4.6 

10.4 

2.9 

-2.2 

.5 

-.1 

1.2 
4.2 
3.2 
.5 
-.4 

1.8 
-.5 

.1 
-.2 

.5 

3.3 
2.2 
1.6 
3.1 
4.8 

2.2 
3.2 
3.8 
11.8 
18.3 

6.6 
3.3 
6.6 
9.1 


8.0 
-2.9 

1.8 

9.5 

-.6 

-1.0 

.2 

.2 
2.8 
3.6 
2.3 
-.2 

.8 



.3 

-.3 

.4 

1.7 
3.2 
1.2 
2.9 
3.6 

3.5 
3.1 
3.1 
9.1 
15.3 

10.8 
4.2 
6.0 
7.8 


-2.4 
-7.4 

13.3 
5.3 
-5.9 
-2.2 
-1.9 

-2.9 

3.6 

5.3 

.4 

-3.7 

5.2 
-1.8 

.5 
-1.3 

.4 

9.1 
1.4 
-.4 
4.8 
8.2 

-2.5 

5.9 

8.0 

22.5 

13.0 

5.5 

-2.5 

6.6 

11.9 


9.2 
-8.1 

1.9 
12.4 
-.9 
-5.2 
-.8 

-2.5 
-.2 
3.5 
5.8 

-4.7 

2.2 

-.4 

.9 

-1.2 

.5 

3.8 
6.5 
-1.6 
3.7 
6.1 

3.2 
1.6 
5.6 
20.3 
14.0 

8.4 
-.4 
4.9 
9.4 






4.0 
-4.5 

8.2 

.9 

-1.1 

1.6 
.3 

1.7 

2.5 

1.7 

.2 

.8 

.4 

-.3 

-.1 

.1 

.1 

.9 
1.7 
2.1 

2.0 
2.9 

3.9 
2.0 
2.0 
7.4 
20.5 

6.7 
4.9 
6.1 
8.3 


6.3 
-2.1 

1.6 

7.2 

-1.3 

.9 
.3 

.8 

2.4 

2.5 

.1 

1.3 

.4 
-.1 
-.2 

-.1 

.7 
1.6 
1.9 
2.1 
2.4 

3.0 

3.4 
1.8 
4.5 
17.0 

10.5 
5.7 
6.4 
6.7 


10.4 
-.6 

10.3 

3.4 

.8 

2.3 

1.1 

5.6 
8.3 
4.3 
1.3 
1.0 

.1 
.2 
.3 
.5 
.9 

1.5 
3.9 
3.1 
3.0 
4.6 

4.9 
2.4 
2.0 
5.3 
22.6 

8.2 
6.4 
7.2 
8.0 


9.0 


1949 






5.0 


1950 






2.4 


1951 






9.7 


1952 






1.7 


1953 






1.7 


1954 






1.2 


1955 






3.0 


1956 






7.4 


1957 






6.2 


1958 






2.6 


1959 






1.9 


I960 






.2 


1961 






.1 


1962 






.4 


1963 






.2 


1964 






1.0 


1965 






1.2 


1966 






2.5 


1967 






3.3 


1968 


2.4 

3.4 

4.3 
2.1 
2.0 
6.7 
21.2 

7.2 
5.5 
6.6 
8.2 


2.6 
2.7 

3.5 
3.7 
2.0 
4.1 
16.0 

12.1 

6.0 
6.5 
7.2 


3.5 


1969 


3.3 


1970 


4.8 


1971 


4.1 


1972 


2.5 


1973 


3.3 


1974 


14.2 


1975 


15.2 


1976 


6.6 


1977 


6.5 


1978 


7.9 








Change from preceding month 




Unad- 
justed 


Sea- 
sonally 

ad- 
Justed 


Unad- 
justed 


Sea- 
sonally 

ad- 
justed 


Unad- 
justed 


Sea- 
sonally 

ad- 
justed 


Unad- 
justed 


Sea- 
sonally 

ad- 
justed 


Unad- 
justed 


Sea- 
sonally 

ad- 
justed 


1977: Jan 


0.6 
.9 
.5 
.7 
.8 
.1 

.4 


.3 
1.1 

.4 

.5 

.8 
.8 
.3 
1.3 
.8 
.7 

.8 
-.2 

.7 
1.4 
.5 
.9 


0.6 
1.0 
.8 
.7 
.8 
.1 

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

.7 
1.1 

.5 
1.3 

.7 

.7 

.5 

.7 
.9 
.8 
.8 


0.3 
1.9 
.9 
1.0 
2.0 
-.8 

.7 

-1.1 

.1 

-.1 

.4 
1.2 

1.1 
2.4 
.3 
2.1 
1.1 
1.3 

.4 
-2.1 
1.7 
1.5 
-.2 
1.8 


0.3 
2.5 
1.3 
.7 
1.4 
-1.0 

-.2 
-.3 
-.1 

.2 
1.3 

.4 

1.1 
3.0 

.7 
1.8 

.4 
1.2 

-.5 
-1.4 
1.7 
1.7 
.6 
.9 


0.7 
.5 
.5 
.6 
.5 
.5 

.3 
.4 
.5 
1.5 
.3 
.3 

.7 
.3 
.3 
1.0 
.7 
.6 

.9 
.4 
.4 
1.4 
.7 

• 6 


0.6 
.6 
.6 
.8 
.5 
.5 

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

.6 
.4 
.5 
1.0 
.8 
.6 

.8 
.4 
.5 
.6 
.8 
.8 


0.8 
.5 
.5 
.7 
.4 
.5 

.3 
.3 
.4 
1.0 
.2 
.2 

.7 
.2 
.3 
1.2 
.8 
.5 

1.0 
.4 
.2 

1.4 
.5 
.7 


1.0 
.5 
.7 
.9 
.5 
.5 

.1 
.3 
.5 
.4 
.3 
.4 

.6 
.3 
.5 
1.3 
.8 
.5 

1.0 
.5 
.4 
.6 
.7 
.8 


0.5 
.3 
.3 
.5 
.4 
.4 

.4 
.5 
.4 
2.3 
.5 
.4 

.7 
.4 
.5 
.5 
.7 
.6 

.6 
.4 
.5 
1.5 
.9 
.5 


0.2 


Feb 


.6 


Mar 


.4 




.6 


May 


.6 


June 


.5 


July.... 


.4 


Aug 


.5 


Sept 


.5 


Oct 


1.3 


Nov 


.5 


Dec 


.7 


1978: Jan 


.5 


Feb 


.6 


Mar 


.6 


Apr 


.6 


May.. 


.8 


June 


.7 


July 


.6 


Aug 


.4 


Sept 


.5 


Oct 


.6 


Nov 


1.0 


Dec 


.8 







1 Changes from December to December are based on unadjusted indexes. 
Source: Department of Labor, Bureau of Labor Statistics. 



250 



MONEY STOCK, CREDIT, AND FINANCE 

Table B-59. — Money stock' measures, 1953-78 
[Averages of daily figures; billions of dollars, seasonally adjusted, except as noted] 





Overall measures i 






Components and related items 


















Deposits at commercial banks 


De- 


Other 




Year and 




Time and savings 


U.S. 


month 


Mi 


M,+ 


Mj 


Mi 


Cur- 








posits 
at non- 


check- 
able 


Govern- 










ment 












rency 


De- 
mand 


Total 


Time 


Sav- 
ings' 


bank 

thrift 

institu- 


de- 
posits 
(unad- 


de- 
posits 
(unad- 
justed)* 




Large 
CDs' 




















Other 




tions* 


justed) • 


1953: Dec 


128.8 
132.3 
135.2 
136.9 
135.9 
141.1 
143.4 








27.7 
27.4 
27.8 
28.2 
28.3 
28.6 
28.9 


101.1 
104.9 
107.4 
108.7 
107.6 
112.6 
114.5 


44.5 
48.3 
50.0 
51.9 
57.4 
65.4 
67.4 












3.8 


1954: Dec 


















5.0 


1955: Dec 


















3.4 


1956- Dec 


















3.4 


1957- Dec 


















3.5 


1958- Dec 


















.3.9 


1959: Dec... 





210.9 


303.8 




67.4 


92.9 




4.9 


1960: Dec... 


144.2 




217.1 


319.3 


29.0 


115.2 


72.9 




72.9 


102.3 




4.7 


1961: Dec... 


148.7 




228.6 


342.1 


29.6 


119.1 


82.7 


2.8 


79.9 


113.4 




4.9 


1962: Dec... 


150.9 




242.9 


369.2 


30.6 


120.3 


97.6 


5.7 


92.0 


126.4 




5.6 


1963: Dec... 


156.5 




258.9 


400.3 


32.5 


124.1 


112.0 


9.6 


102.3 


141.4 




5.1 


1964: Dec... 


163.7 




277.1 


434.4 


34.3 


129.5 


126.2 


12.8 


113.4 


157.3 




5.5 


1965: Dec... 


171.4 




301.4 


471.8 


36.3 


135.1 


146.4 


16.4 


130.0 


170.4 




4.6 


1966: Dec... 


175.8 




318.2 


495.5 


38.3 


137.5 


157.9 


15.5 


142.4 


177.3 




3.4 


1967: Dec... 


187.4 


280" 7" 


350.0 


544.0 


40.4 


147.0 


183.3 


20.6 


69.4 


93.3 


194.0 


0.1 


5.0 


1968: Dec... 


202.5 


297.7 


383.3 


589.9 


43.4 


159.0 


204.3 


23.5 


85.6 


95.2 


206.7 


.1 


5.0 


1969: Dec... 


209.0 


301.8 


392.5 


607.4 


46.1 


162.9 


194.4 


10.9 


90.7 


92.8 


214.9 


.1 


5.6 


1970: Dec. 


219.7 


317.3 


423.7 


656.3 


49.1 


170.7 


229.2 


25.3 


106.5 


97.4 


232.6 


.1 


7.3 


1971: Dec.. 


234.0 


345.8 


471.9 


745.2 


52.6 


181.5 


271.1 


33.3 


126.2 


111.6 


273.3 


.1 


6.9 


1972: Dec.. 


255.3 


378.9 


525.3 


844.4 


56.8 


198.4 


313.5 


43.5 


146.5 


123.5 


319.2 


.1 


7.4 


1973: Dec. 


270.5 


397.7 


571.4 


919.2 


61.5 


209.0 


363.9 


63.0 


173. 9 


127.0 


347.8 


.3 


6.3 


1974: Dec. 


282.9 


419.0 


612.2 


981.2 


67.8 


215.1 


418.3 


89.0 


193.5 


135.8 


369.1 


.4 


4.9 


1975: Dec. 


295.2 


456.4 


664.7 


1, 092. 5 


73.7 


221.5 


450.9 


81.3 


209.1 


160.5 


427.8 


.7 


4.1 


1976: Dec. 


313.5 


516.8 


740.5 


1, 236. 5 


80.7 


232.8 


489.7 


62.7 


225.1 


201.9 


496.0 


1.4 


4.4 


1977: Dec. 


338.5 


560.2 


809.5 


1, 376. 1 


88.6 


249.9 


545.0 


74.0 


251.5 219.6 


566.6 


2.1 


5.1 


1978: Dec p. 


361.1 


584.1 


872.0 


1, 498. 5 


97.5 


263.6 


607.8 


97.0 


290.6 


220.2 


626.5 


2.8 


10.2 


1977: Jan.. 


315.9 


523.1 


747.4 


1, 249. 6 


81.3 


234.6 


494.6 


63.1 


225.7 


205.8 


502.2 


1.4 


3.9 


Feb.. 


317.3 


527.0 


753.1 


1, 260. 7 


81.9 


235.4 


499.0 


63.3 


227.5 


208.3 


507.6 


1.4 


4.2 


Mar.. 


319.5 


531.1 


759.2 


1,271.7 


82.4 


237.1 


502.0 


62.2 


229.7 


210.1 


512.5 


1.5 


4.3 


Apr.. 


323.2 


536.8 


766.1 


1, 283. 4 


83.1 


240.0 


504.5 


61.6 


230.9 


212.0 


517.3 


1.6 


5.4 


May.. 


323.7 


538.3 


769.8 


1, 292. 2 


83.8 


240.0 


508.9 


62.9 


233.0 


213.0 


522.4 


1.6 


3.6 


June. 


325.6 


540.3 


775.5 


1, 303. 3 


84.2 


241.4 


513.2 


63.3 


236.9 


213.0 


527.8 


1.7 


5.0 


July.. 


328.7 


544.6 


784.2 


1,318.5 


85.1 


243.6 


518.3 


62.8 


241.4 


214.1 


534.3 


1.8 


3.6 


Aug.. 


330.5 


549.4 


789.2 


1,331.3 


85.5 


245.0 


521.9 


63.2 


241.7 


217.0 


542.1 


1.8 


3.4 


Sept.. 


333.0 


553.7 


795.1 


1, 344. 9 


86.3 


246.6 


525.9 


63.8 


243.3 


218.8 


549.8 


1.9 


5.0 


Oct.. 


335.9 


557.5 


801.4 


1, 357. 9 


87.1 


248.7 


531.9 


66.4 


246.0 


219.6 


556.5 


2.0 


3.7 


Nov.. 


336.2 


557.7 


805.4 


1, 367. 1 


87.7 


248.5 


540.1 


70.9 


249.7 


219.4 


561.7 


2.1 


3.5 


Dec. 


338.5 


560.2 


809.5 


1, 376. 1 


88.6 


249.9 


545.0 


74.0 


251.5 


219.6 


566.6 


2.1 


5.1 


1978: Jan... 


341.7 


564.6 


815.9 


1, 386. 6 


89.4 


252.2 


550.6 


76.3 


253.6 


220.7 


570. 7 


2.2 


4.3 


Feb... 


341.8 


565.0 


819.1 


1, 393. 1 


90.1 


251.7 


556.7 


79.4 


256.4 


220.9 


574.0 


2.3 


4.3 


Mar.. 


342.9 


566.2 


822.6 


1, 400. 3 


90.7 


252.3 


561.7 


82.0 


258.7 


221.0 


577.7 


2.3 


4.8 


Apr... 


348.5 


572.6 


830.3 


1,411.4 


91.2 


257.3 


565.2 


83.4 


260.1 


221.6 


581.2 


2.5 


5.0 


May.. 


350.6 


575.2 


835.2 


1,419.9 


92.1 


258.5 


571.6 


87.1 


262.6 


222.0 


584.7 


2.6 


4.0 


June.. 


352.8 


577.1 


840.6 


1, 429. 8 


92.8 


259.9 


574.5 


86.7 


266.1 


221.7 


589.2 


2.6 


6.2 


July.. 


354.2 


577.8 


846.2 


1,441.0 


93.3 


260.9 


579.4 


87.4 


271.1 


220.9 


594.7 


2.7 


4.5 


Aug.. 


356.7 


582.0 


853.5 


1, 455. 1 


94.0 


262.8 


583.0 


86.3 


274.3 


222.4 


601.6 


2.8 


3.6 


Sept.. 


360.9 


587.9 


862.4 


1, 472. 1 


95.2 


265.7 


589.7 


88.1 


277.4 


224.2 


609.6 


2.8 


6.2 


Oct... 


362.0 


588.8 


867.4 


1, 483. 9 


96.0 


266.1 


593.6 


88.2 


281.5 


223.9 


616.5 


2.8 


4.3 


Nov.. 


360.6 


585.3 


870.5 


1, 492. 1 


96.7 


263.9 


605.3 


95.4 


288.0 


221.8 


621.6 


2.8 


8.0 


Dec. 


361.1 


584.1 


872.0 


1, 498. 5 


97.5 


263.6 


607.8 


97.0 


290.6 


220.2 


626.5 


2.8 


10.2 



» Mi is currency plus demand deposits; M ( + is Mi plus savings deposits at commercial banks and checkable deposits at 
nonbank thrift institutions; M ; is Mi plus time and savings deposits at commercial banks other than large certificates of 
deposit (CDs); and M 3 is Mi plus deposits at nonbank thrift institutions. 

> Negotiable time certificates of deposit (CDs) issued in denominations of $100,000 or more by large weekly reporting 
commercial banks. 

* Includes negotiable order of withdrawal (NOW) accounts at commercial banks. 

'Average of the beginning and end-of-month deposits of mutual savings banks, savings capital at savings and loan 
associations, and credit union shares. 

> Includes negotiable order of withdrawal (NOW) accounts at thrift institutions, credit union share draft accounts, and 
demand deposits at mutual savings banks. 

•Deposits at all commercial banks. Includes Treasury note balances beginning November 1978. 

Source: Board of Governors of the Federal Reserve System. 



251 



Table B-60. — Commercial bank loans and investments, 1930-78 
(Billions of dollars] 





Total loans 
and invest- 
ments » 


Loans 


Investments 


Loans plus 
loans sold to 
bank affiliates ' 


End of year 
or month > 


Total ' 


Commercial 

and 
industrial 


U.S. Treasury 
securities 


Other 
securities 


1930: June 


48.9 
30.4 
40.7 

43.9 
50.7 
67.4 
85.1 
105.5 
124.0 
114.0 
116.3 
114.2 


34.5 
16.3 
17.2 

18.8 
21.7 
19.2 
19.1 
21.6 
26.1 
31.1 
38.1 
42.4 




5.0 
7.5 
16.3 

17.8 
21.8 
41.4 
59.8 
77.6 
90.6 
74.8 
69.2 
62.6 


9.4 
6.5 
7.1 

7.4 
7.2 
6.8 
6.1 
6.3 
7.3 
8.1 
9.0 
9.2 




1933: June 






1939 






1940 






1941 






1942 






1943 . 






1944 






1945 






1946 






1947 






1948 














Seasonally adjusted 


1948 


113.0 
118.7 

124.7 
130.2 
139.1 
143.1 
153.1 
157.6 
161.6 
166.4 
181.2 
188.7 

197.4 
212.8 
231.2 
250.2 
272.3 
300.1 
* 316. 1 
352.0 
390.2 
401.7 

435.5 
485.7 
558.0 
633.4 
691.1 
721.8 
785.1 
870.6 
967.3 

881.2 
887.7 
894.1 
909.0 
921.7 
932.2 

940.7 
944.6 
952.4 
960.9 
966.5 
967.3 


41.5 
42.0 

51.1 

56.5 
62.8 
66.2 
69.1 
80.6 
88.1 
91.5 
95.6 
110.5 

116.7 
123.6 
137.3 
153.7 
172.9 
198.2 
< 213.9 
231.3 
258.2 
279.4 

292.0 
"320.9 
378.9 
449.0 
500.2 
496.9 
538.9 
617.0 
709.0 

625.1 
628.4 
637.2 
647.6 
659.7 
667.8 

675.1 
680.2 
687.3 
696.8 
706.8 
709.0 




62.3 
66.4 

61.1 
60.4 
62.2 
62.2 
67.6 
60.3 
57.2 
56.9 
65.1 
57.7 

59.9 
65.3 
64.7 
61.5 
60.7 
57.1 
53.5 
59.4 
60.7 
51.2 

57.8 
60.6 
62.6 
54.5 
51.1 
80.1 
98.0 
95.6 
88.4 

96.5 
99.4 
96.1 
98.3 
97.9 
100.2 

100.6 
97.9 
97.2 
95.2 
90.3 
88.4 


9.2 

10.3 

12.4 
13.4 
14.2 
14.7 
16.4 
16.8 
16.3 
17.9 
20.5 
20.5 

20.8 
23.9 
29.2 
35.0 
38.7 
44.8 
M8.7 
61.3 
71.3 
71.1 

85.7 
• 104. 2 
116.5 
129.9 
139.8 
144.8 
148.2 
158.0 
169.9 

159.6 
159.9 
160.8 
163.1 
164.1 
164.2 

165.0 
166.5 
167.9 
168.9 
169.4 
169.9 




1949 






1950 






1951 






1952 






1953 






195* . 






1955 




1956 






1957 






1958... 






1959 3 


39.4 

42.1 
43.9 
47.6 
52.1 
58.4 
69.5 
78.6 
86.2 
95.9 
105.7 

110.0 
116.2 
130.4 
156.6 
183.5 
176.2 
179.7 
201.4 
228.9 

203.8 
205.8 
209.8 
212.4 
217.9 
219.0 

220.8 
222.8 
224.6 
227.0 
228.9 
228.9 


110.5 


1960 


116.7 


1961 


123.6 


1962 


137.3 


1963 


153.7 


1964 


172.9 


1965 


198.2 


1966... 


* 213. 9 


1967 


231.3 


1968 


258.2 


1969" 


283.3 


1970.. 


294.7 


1971 


•323.7 


1972 


381.5 


1973... 


453.3 


1974 


'505.0 


1975 


501.3 


1976 


542.7 


1977 


621.9 


1978 * 


712.8 


1978: Jan 


629.9 


Feb 

Mar 

Apr 


633.0 
641.7 
652.1 


May 

July " 

Aug " 

Sept* 

Oct » 

Nov » 

Dec » 


664.1 
672.3 

679.7 
684.9 
691.9 
700.7 
710.5 
712.8 



1 Data are for last Wednesday of month or year (except June 30 and December 31 call dates). 

2 Adjusted to exclude all interbank loans beginning 1948 and domestic interbank loans only beginning January 1959. 

3 Beginning January 1959, loans and investments are reported gross, without valuation reserves deducted, rather than 
net of valuation reserves, as in earlier periods. 

* Effective June 1966, balances accumulated for payment of personal loans (then about $1.1 billion) are excluded from 
loans at all commercial banks, and certain certificates of CCC and Export-Import Bank (then about $1 billion) are included 
in other securities rather than in loans. 

• Beginning June 1969, data include all bank-premises subsidiaries and other significant majority-owned domestic 
subsidiaries; earlier data include commercial banks only. 

« Beginning June 1971, Farmers Home Administration insured notes (then about $0.7 billion) are classified as other 
securities rather than as loans. 

' Beginning August 1974, reflects new definition of affiliates included and different group of reporting banks. Amount of 
total loans sold was reduced by $0.1 billion. 

Note.— In addition to footnoted changes affecting comparability of the data, comparability may also be affected by bank 
mergers, liquidations, loan reclassifications, etc. 

Source: Board of Governors of the Federal Reserve System. 



252 



Table B-61. — Liquid asset holdings of private domestic nonfinancial investors, 1952-78 
[Average outstanding; billions of dollars, seasonally adjusted] 





Total 
liquid 
assets 


Currency and deposits 


U.S. Treasury 
securities 


Nego- 
tiable 
certifi- 
cates 
of de- 
posit < 






Total 


Cur- 
rency i 


De- 
mand 

de- 
posits > 


Time deposits 


Other 
private 


Year 

and 

month 


Com- 
mer- 
cial 
banks 1 


Non- 
bank 
thrift 
institu- 
tions 3 


Sav- 
ings 
bonds 3 


Short- 
term 
market- 
able 
secu- 
rities * 


money 
market 
instru- 
ments • 


1952: Dec 


269.1 
284.5 
295.2 

314.7 
325.3 
337.9 
354.2 
373.2 

386.6 
410.4 
441.8 
479.1 
515.2 

559.4 
587.0 
638.1 
696.6 
722.5 

769.7 

852.5 

967.2 

1,085.3 

1,170.2 

1,290.6 
1,424.6 
1,591.0 
1,757.0 

1, 438. 1 
1, 453. 
1, 463. 9 
1, 476. 2 
1,485.7 
1, 496. 5 

1,512.9 
1,527.0 
1,542.7 
1,561.2 
1,576.5 
1,591.0 

1,607.7 
1,619.2 
1,631.0 
1,647.4 
1,662.3 
1,674.2 

1, 686. 2 
1,699.2 
1,720.3 
1,732.6 
1, 747. 5 
1,757.0 


200.9 
211.0 
223.9 

235.4 
246.2 
257.2 
277.4 
290.7 

305.7 
326.2 
352.2 
382.2 
414.6 

451.2 
474.4 
521.1 
565.6 
582.9 

632.7 
719.0 
816.6 
887.7 
945.0 

1,055.3 
1,195.2 
1,328.3 
1,451.8 

1, 206. 9 
1,217.9 
1, 228. 3 
1,240.3 
1, 248. 1 
1, 258. 

1,272.6 
1, 284. 
1,297.8 
1,311.2 
1,319.2 
1,328.3 

1,339.1 
1,345.6 
1,352.8 
1,363.5 
1,371.5 
1,381.6 

1,393.8 
1,407.8 
1,424.3 
1,436.7 
1,445.2 
1,451.8 


27.3 
27.7 
27.4 

27.8 
28.2 
28.3 
28.6 
28.9 

29.0 
29.6 
30.6 
32.5 
34.3 

36.3 
38.3 
40.4 
43.4 
46.1 

49.1 
52.6 
56.8 
61.5 
67.8 

73.7 

80.7 
88.6 
97.5 

81.3 
81.9 
82.4 
83.1 
83.8 
84.2 

85.1 
85.5 
86.3 
87.1 
87.7 
88.6 

89.4 
90.1 
90.7 
91.2 
92.1 
92.8 

93.3 
94.0 
95.2 
96.0 
96.7 
97.5 


91.6 
92.8 
96.2 

98.5 
99.5 
97.9 
102.2 
104.2 

104.6 
106.3 
106.5 
109.7 
114.3 

119.4 
121.9 
130.5 
141.2 
145.2 

152.0 
161.8 
176.1 
183.7 
187.1 

192.4 
200.0 
213.9 
226.4 

201.4 
202.1 
203.4 
206.8 
206.0 
206.5 

208.4 
208.5 
210.3 
213.0 
212.1 
213.9 

216.6 
216.0 
216.3 
221.5 
222.1 
223.1 

224.5 
226.2 
228.4 
228.5 
226.3 
226.4 


39.1 

41.9 
45.1 

46.9 
49.0 
54.6 
61.8 

64.7 

69.9 
77.0 
88.8 
98.6 
108.8 

125.1 
136.9 
156.2 
174.3 
176.8 

198.9 
233.6 
264.3 
294.4 
321.1 

360.6 
417.3 
459.2 
501.6 

422.0 
426.3 
430.0 
433.1 
436.0 
439.4 

444.8 
447.8 
451.4 
454.6 
457.6 
459.2 

462.4 
465.5 
468.1 
469.6 
472.5 
476.5 

481.3 
486.1 
491.0 
495.7 
500.5 
501.6 


42.8 
48.6 
55.2 

62.3 
69.5 
76.4 
84.8 
92.9 

102.3 
113.4 
126.4 
141.4 
157.3 

170.4 
177.3 
194.0 
206.7 
214.9 

232.7 
271.1 
319.3 
348.1 
369.1 

428.6 
497.3 
566.6 
626.4 

502.2 
507.6 
512.5 
517.3 
522.4 
527.8 

534.3 
542.1 
549.8 
556.5 
561.7 
566.6 

570.7 
574.0 
577.7 
581.2 
584.7 
589.2 

594.7 
601.6 
609.6 
616.5 
621.6 
626.4 


49.2 
49.3 
49.9 

50.2 
50.1 
48.3 
47.8 
46.1 

45.7 
46.5 
46.9 
48.1 
49.0 

49.6 
50.2 
51.1 
51.8 
51.7 

52.0 
54.3 
57.6 
60.4 
63.3 

67.2 
71.9 
76.6 
80.6 

72.3 
72.6 
73.0 
73.4 
73.8 
74.2 

74.7 
75.1 
75.3 
75.8 
76.2 
76.6 

77.0 
77.4 
77.8 
78.2 
78.6 
78.9 

79.3 
79.5 
79.8 
80.1 
80.4 
80.6 


18.4 
23.1 

20.1 

27.7 
27.4 
30.6 
27.6 
35.5 

32.4 
32.0 
33.4 
35.0 
33.0 

35.8 
37.7 
34.7 
40.9 
53.2 

41.9 
31.5 
34.3 
43.4 
47.1 

66.3 
66.5 
77.6 
82.7 

66.9 
70.0 
70.4 
70.1 
68.9 
67.9 

69.2 
71.7 
73.3 
75.5 
77.1 
77.6 

79.5 
80.1 
79.8 
80.7 
81.6 
81.7 

80.1 
80.7 
83.6 
83.1 
82.1 
82.7 


2.7 
5.3 
9.0 
11.6 

15.1 
14.3 
18.7 
21.7 
8.3 

21.8 
27.6 
36.2 
53.8 
70.4 

58.4 
43.2 
52.3 
68.5 

43.9 
44.1 
42.9 
41.9 
42.9 
43.4 

43.2 
43.7 
44.0 
46.1 
50.0 
52.3 

53.4 
54.8 
56.5 
58.6 
62.3 
61.7 

61.7 
59.6 
60.7 
60.2 
66.9 
68.5 


0.7 


1953: Dec 


1.1 


1954: Dec 


1.2 


1955: Dec - 


1.4 


1956: Dec.- 


1.6 


1957: Dec 


1.8 


1958: Dec 


1.4 


1959: Dec 


.9 


I960: Dec 


2.8 


1961: Dec 


3.1 


1962: Dec 


4.0 


1963: Dec... 


4.8 


1964: Dec 


6.9 


1965: Dec 


7.6 


1966: Dec 


10.4 


1967: Dec 


12.4 


1968: Dec 


16.6 


1969: Dec 


26.4 


1970: Dec... 


21.3 


1971: Dec 


20.1 


1972: Dec 


22.5 


1973: Dec 


40.0 


1974: Dec... 


44.4 


1975: Dec 


43.3 


1976: Dec 


47.8 


1977: Dec 


56.3 


1978: Dec 


73.4 


1977: Jan 


48.0 


Feb 


48.5 




49.3 


Apr 


50.4 




51.8 


June 


52.9 


July 


53.2 


Aug 


52.5 


Sept 


52.1 


Oct 


52.6 


Nov 


54.0 


Dec 


56.3 


1978: Jan 


58.7 


Feb... 


61.4 


Mar 


64.1 


Apr. . 


66.4 


May 


68.3 


June 


70.4 


July.. 


71.3 


Aug 


71.6 


Sept 


72.0 


Oct 


72.5 


Nov 


73.0 


Dec «•.. 


73.4 







i Money stock components (see Table B-59) after deducting foreign holdings and holdings by domestic financial institu- 
tions. The three columns add to M2 held by domestic nonfinancial sectors. 
3 As published in money stock statistics. 
3 Series E and H savings bonds, other savings bonds, and savings notes held by individuals. 

• Short-term marketable U.S. Treasury securities excluding official, foreign, and financial institution holdings. 

• Certificates over $100,000 at weekly reporting banks, except foreign holdings. 

• Commercial paper, bankers' acceptances, Federal funds, security repurchase agreements, and money market mutual 
fund shares held outside banks and other financial institutions. 

Source: Board of Governors of the Federal Reserve System. 



253 



Table B-62. — Total funds raised in credit markets by nonfinancial sectors, 1970-78 

[Billions of dollars] 



Item 



Total funds raised 

U.S. Government. 



Treasury issues 

Agency issues and mortgages. 



Foreign. 



Corporate equities. 
Debt instruments.. 



Private domestic nonfinancial sectors. 



Corporate equities. 
Debt instruments.. 



Debt capital instruments. 



State and local government obli- 
gations 

Corporate bonds... 

Mortgages.. 

Home 

Multi-family residential 

Commercial 

Farm 



Other debt instruments. 



Consumer credit 

Bank loans n.e.c. .. 
Open-market paper. 
Other. 



By borrowing sector: Total. 



State and local governments. 

Households 

Nonfinancial business 

Farm 

Nonfarm noncorporate.. 

Corporate 



Total funds advanced to nonfinancial sectors.. 
Financed directly or indirectly by: 

Private domestic nonfinancial sectors. 
Deposits 



Demand deposits and currency. 
Time and savings accounts 

At commercial banks.. 

At savings institutions 



Credit market instruments, net.. 



U.S. Government securities 

Private credit market instru- 
ments... 

Corporate equities. 

Less security debt 



Other sources: 

Foreign funds. 
At banks. 
Direct 



Change in U.S. Government cash 
balance 

U.S. Government loans 

Private insurance and pension re- 
serves 

Other.. 



1970 



100.6 
11.9 



12.9 
-1.0 



2.7 

.1 

2.7 



86.0 



5.7 

80.3 



60.2 



11.2 
19.8 
29.2 
14.4 
6.9 
7.1 



20.1 

5.9 
6.8 
2.6 
4.8 

86.0 

11.3 

24.9 

49.8 

2.3 

6.8 

40.7 

100.6 



63.4 
64.2 

8.9 

55.3 
38.7 
16.6 



-7.3 

7.2 
-1.6 
-.9 



4.2 
-6.9 
11.1 



2.8 
2.8 



21.9 
5.6 



1971 



153.5 
24.9 



26.0 
-1.1 



5.2 



.0 
5.2 



123.5 



11.4 
112.0 



86. 



17.4 

18.8 

50.5 

28.6 

9.7 

9.8 

2.4 

25.3 

13.1 
8.1 

-.4 
4.4 

123.5 

17.7 
45.2 
60.6 
4.5 
11.6 
44.5 



153.5 



85.9 

92.8 

13.7 
79.1 
39.5 
39.6 

-6.9 

-10.7 

11.0 

-5.1 

2.1 



23.1 
-4.1 
27.2 



3.2 
2.8 



24.4 
14.2 



1972 



176.0 
15.1 

14.3 

.8 

4.0 

-.4 
4.4 

156.9 

10.9 
146.0 

102.3 



14.7 
12.2 
75.4 
42.6 
12.7 
16.5 
3.6 

43.7 

17.1 

18.9 

.8 

6.9 

156.9 

14.5 
64.3 
78.1 
5.8 
14.1 
58.3 

176.0 



116.4 

105.0 

21.2 
83.8 
38.3 
45.4 

11.5 

3.9 

17.6 

-5.7 

4.3 



15.5 
4.6 
10.8 



-.3 

1.8 



26.1 
16.4 



1973 



203.8 
8.3 



7.9 

.4 

6.2 



-.2 

6.4 



189.3 



7.9 

181.4 



105.0 



14.7 
9.2 
81.2 
46.4 
10.4 
18.9 
5.5 

76.4 

23.8 
39.8 
2.5 
10.3 

189.3 

13.2 

80.9 
95.2 
9.7 
12.8 
72.7 

203.8 



140.7 

90.6 

14.4 
76.1 
47.7 
28.5 

50.1 

19.2 

33.6 
-6.9 
-4.2 



9.3 
5.8 
3.5 



-1.7 
2.8 



30.6 
22.0 



1974 

188.8 

11.8 

12.0 
-.2 

15.3 

-.2 
15.6 

161.6 

4.1 
157.5 

98.0 



16.5 
19.7 
61.9 
34.8 

6.9 
15.1 

5.0 

59.6 

10.2 

29.0 

6.6 

13.7 

161.6 

15.5 
49.2 
97.0 
7.9 
7.4 
81.8 

188.8 



116.5 

75.7 

8.9 
66.7 
45.0 
21.8 

40.8 

17.5 

24.6 
-2.2 



28.6 
16.8 
11.7 



-4.6 
9.7 



33.2 

5.4 



1975 

208.1 

85.4 

85.8 
-.4 

13.2 

.2 
13.0 

109.5 

9.9 
99.6 

97.8 



15.6 
27.2 
55.0 
39.5 
.0 
11.0 
4.6 

1.8 

9.4 

-14.0 

-2.6 

9.0 

109.5 

13.2 

48.6 
47.7 
8.7 
2.0 
37.0 

208.1 



137.8 
96.8 

12.0 

84.8 
25.3 
59.4 

41.0 

23.0 

21.9 

-3.6 

.2 



11.7 

.9 

10.7 



2.9 

15.1 



39.6 
1.1 



1976 

272.5 

69.0 

69.1 
-.1 

20.7 

.3 
20.4 

182.8 

10.5 
172.3 

126.8 



19.0 
22.8 
85.0 
63.7 

1.8 
13.4 

6.1 

45.5 

23.6 
3.5 
4.0 

14.4 

182.8 

18.5 
89.9 
74.4 
11.0 
5.2 
58.2 

272.5 



166.2 

128.8 

16.6 
112.2 
43.7 
68.5 

37.5 

19.6 

24.6 

-3.4 

3.3 



23.0 
5.1 
17.9 



3.2 

8.9 



48.2 
23.0 



See next page for continuation of table. 



254 



Table B- 62. — Total funds raised in credit markets by nonfinancial sectors, 1970-78 — Continued 

[Billions of dollars] 



Item 



1978 unadjusted 
quarterly flows 



III 



1978 seasonally 
adjusted annual rates 



Total funds raised 

U.S. Government 

Treasury securities 

Agency issues and mortgages.. — 

Foreign - 

Corporate equities.. 

Debt instruments 

Private domestic nonfinancial sectors 

Corporate equities. 

Debt instruments 

Debt capital instruments 

State and local government obligations 

Corporate bonds 

Mortgages _ 

Home 

Multi-family 

Commercial 

Farm 

Other debt instruments 

Consumer credit... 

Bank loans n.e.c. 

Open-market paper... 

Other 

By borrowing sector: Total.. 

State and local governments 

Households 

Nonfinancial business 

Farm _ 

Nonfarm noncorporate. 

Corporate 

Total funds advanced to nonfinancial sectors 

Financed directly or indirectly by: 

Private domestic nonfinancial sectors 

Deposits 

Demand deposits and currency 

Time and savings accounts 

At commercial banks 

At savings institutions 

Credit market instruments, net. 

U.S. Government securities 

Private credit market instruments 

Corporate equities.. 

Less security debt 

Other sources: 

Foreign funds 

At banks 

Direct 

Change in U.S. Government cash balance... 

U.S. Government loans 

Private insurance and pension reserves 

Other 



80.2 
20.8 

21.1 

-.3 

2.1 

-.3 
2.5 

57.2 

.3 
57.0 

36.9 

3.8 
4.4 
28.7 
19.2 
2.4 
4.8 
2.4 

20.1 

2.4 
9.5 
1.8 

6.4 

57.2 

3.5 
24.8 
29.0 
2.7 
3.7 
22.6 

80.2 



40.8 

17.4 

-16.8 
34.2 
17.7 
16.5 

23.4 



13.7 
1.1 
.3 



14.4 
-2.1 

16.4 

-6.4 
5.6 
13.3 
12.4 



95.4 
2.6 



2.7 

-. 1 



4.3 



-.0 
4.4 



.2 

88.4 

53.6 

10.9 
5.2 
37.5 
25.2 
2.4 
6.9 
3.0 

34.8 

15.7 

14.1 

1.0 

3.9 



7.9 

43.6 

37.1 

6.9 

5.0 

25.2 

95.4 



51.1 

40.3 

13.7 
26.6 
12.0 
14.6 

10.8 

-.1 

14.2 

-2.0 

1.3 



-.1 
.7 



11.4 
3.4 
16.2 
13.4 



87.7 
15.1 



15.6 
-.6 



-.0 
.7 

72.0 

.2 
71.8 

53.4 

10.1 
4.5 
38.8 
26.1 
2.8 
7.0 
2.9 

18.4 

13.5 
2.5 

.8 
1.7 

72.0 

9.6 

37.4 

25.0 

4.4 

4.2 

16.4 

87.7 



40.8 

21.5 

-2.5 
24.1 
7.6 

16.4 

19. 3 

11.9 
9.8 
-.9 

1.4 



6.9 
1.4 
5.4 

4.8 
5.0 
15.3 

14.9 



380.4 

66.1 

67.5 
-1.4 

13.3 

-1.3 
14.6 

301.0 

1.0 
299.9 

171.4 

22.2 

14.9 
134.4 
92.2 
10.5 
22.2 
9.5 

128.5 

38.0 

61.3 

5.3 

23.9 

301.0 

20.7 
142.7 
137.6 
11.7 
23.6 
102.2 

380.4 



217.3 

118.4 

11.9 
106.5 
54.2 
52.3 

99.0 

44.7 

55.3 

.1 

1.1 



62.7 

1.7 

61.0 

-19.3 
28.7 
52.6 
38.3 



362.4 

51.5 

51.9 
-.5 

14.3 

-.3 
14.6 

296.6 

.7 

295.9 

194.0 

35.8 
21.9 
136.3 
90.5 
8.9 
26.8 
10.2 

101.9 

51.6 
32.9 
5.1 
12.3 

296.6 

23.4 
152.8 
120.4 
19.8 
17.8 
82.8 

362.4 



204.5 

140.6 

25.2 
115.4 
57.9 
57.5 

63.9 

22.9 

55.1 

-8.8 

5.3 



2.1 

2.4 
-.4 

27.9 
9.8 
65.3 
52.8 



355.7 
59.3 



61.6 
-2.3 



5.1 



-.2 

5.3 



291.3 



290.5 

205.4 

37.6 
23.5 
144.3 
93.9 
11.0 
27.7 
11.7 

85.2 

43.4 

24.2 

5.6 

12.1 

291.3 

35.4 
142.1 
113.9 
17.7 
16.0 
80.2 

355.7 



211.6 
143.4 

21.9 

121.5 
48.5 
73.0 

68.2 

37.9 

43.5 

-7.5 

5.7 



21.6 
4.0 
17.5 

12.2 

16.6 
59.5 
34.4 



Source: Board of Governors of the Federal Reserve System. 



255 



Table B-63. — Federal Reserve Bank credit and member bank reserves, 1929-78 
[Averages of daily figures; millions of dollars] 







Reserve Ba 


rik credit outstanding 




Member bank reserves 


Year and month 


Total 


U.S. 
Govern- 
ment se- 
curities 


Member bank 
borrowings 


Other 


Total 


Re- 
quired 






Total 


Seasonal 




1929: Dec 


1,643 
2,669 
2,612 

2,305 

2,404 

6,035 

11,914 

19,612 

24,744 

24, 746 
22, 858 
23,978 
19,012 

21,606 

25, 446 
27, 299 
27, 107 
26,317 

26, 853 
27,156 
26,186 
28,412 
29,435 

29, 060 
31,217 
33,218 
36,610 
39, 873 
43, 853 
46, 864 
51,268 
56,610 
64, 100 

66, 708 
74, 255 
76,851 
85,642 
93, 967 
99, 651 
107,632 
116,382 
129, 430 

118,598 
115,227 
114,848 
116,784 
119,603 
121,992 

126, 958 
125,955 
127,811 
133, 273 
129,544 
129, 430 


446 
2,432 
2,510 

2,188 
2,219 
5,549 
11,166 
18,693 
23, 708 
23, 767 
21,905 
23, 002 
18, 287 

20, 345 

23, 409 

24, 400 
25,639 
24,917 
24, 602 
24,765 
23, 982 
26,312 
27, 036 

27, 248 

29, 098 

30, 546 
33, 729 
37, 126 
40, 885 
43, 760 
48, 891 
52, 529 
57, 500 

61,688 
69, 158 
71,094 
79,701 
86, 679 
92, 108 
100, 328 
107, 948 
117,344 

108, 195 

106, 808 

107, 790 
109, 358 
111,314 
112,794 

117,210 
117,463 
118,927 
123, 361 
119,352 
117,344 


801 

95 

3 

3 
5 
4 

90 
265 
334 
157 
224 
134 
118 

142 
657 
1,593 
441 
246 
839 
688 
710 
557 
906 

87 
149 
304 
327 
243 
454 
557 
238 
765 
1,086 

321 

107 

1,049 

1,298 

703 

127 

62 

558 

874 

481 
405 
344 
539 
1,227 
1,111 

1,286 
1,147 
1,068 
1,261 
722 
874 




396 
142 
99 

114 
180 
482 
658 
654 
702 
822 
729 
842 
607 

1,119 
1,380 
1,306 
1,027 
1,154 
1,412 
1,703 
1,494 
1,543 
1,493 

1,725 
1,970 
2,368 
2,554 
2,504 
2,514 
2,547 
2,139 
3,316 
5,514 

4,699 
4,990 
4,708 
4,643 
6,585 
7,416 
7,242 
7,876 
11,212 

9,922 
8,014 
6,714 
6,887 
7,062 
8,087 

8,462 
7,345 
7,816 
8,651 
9,470 
11,212 


2,395 
2,588 
11,473 
14, 049 
12,812 
13,152 
12, 749 
14,168 
16,027 
16,517 
17,261 
19,990 
16,291 

17,391 
20,310 
21,180 
19,920 
19,279 
19,240 
19,535 
19,420 
18,899 

2 18,932 

19, 283 
20,118 

20, 040 
20, 746 
21,609 
22,719 
23, 830 
25, 260 
27,221 
28,031 

29, 265 

31,329 

» 31, 353 

3 35,068 
3 36, 941 
« 34, 989 

35, 136 
36,471 
41, 669 

38, 185 
36, 738 
36, 231 

36, 880 
37, 119 

37, 262 

38, 189 
37, 666 

37, 689 

38, 434 

39, 728 
41,669 


2,347 

■1,822 

6,462 

7,403 
9,422 
10,776 
11,701 
12,884 
14, 536 
15,617 
16,275 
19,193 
15,488 

16,364 
19,484 
20,457 
19,227 
18,576 
18,646 
18,883 
18, 843 

18, 383 
18,450 

18,514 

19, 550 
19,468 

20, 210 
21,198 

22, 267 

23, 438 
24,915 
26, 766 
27,774 

28, 993 
31,164 
31,134 
34,806 
36, 602 
34, 727 

34, 964 

36, 297 
41,487 

37, 880 
36. 605 

35, 925 

36, 816 

36, 867 
37, 125 

38, 049 

37, 404 
37,614 

38, 222 

39, 423 
41,487 




1933: Dec 




1939: Dec 




5,011 
6 646 


1940: Dec 




1941: Dec 






1942: Dec 




2 376 


1943: Dec 




1 048 


1944: Dec... 






1945: Dec 




1 491 


1946: Dec 




900 


1947: Dec 




986 


1948: Dec. 




797 


1949: Dec 




803 


1950: Dec... 




1 027 


1951: Dec _ 




826 


1952: Dec 




723 


1953: Dec ._ 




693 


1954: Dec 




703 


1955: Dec 




594 


1956: Dec 




652 


1957: Dec _ 




577 


1958: Dec 




516 


1959: Dec 




482 


1960: Dec 




769 


1961: Dec 




568 


1962: Dec 




572 


1963: Dec 




536 


1964: Dec. 




411 


1965: Dec 




452 


1966: Dec. 




392 


1967: Dec 




345 


1968: Dec 




455 


1969: Dec... 




257 


1970: Dec 




272 


1971: Dec... 




165 


1972: Dec 




'219 


1973: Dec 


41 

32 
13 
12 
54 
134 

32 
52 

47 
43 
93 
120 

143 
188 
191 
221 
185 
134 


3 262 


1974: Dec 

1975: Dec 


'339 
4 262 


1976: Dec 


172 


1977: Dec 


174 


1978: Dec.. 

1978: Jan 

Feb 


182 

305 
133 


Mar 


306 


Apr 


64 


May 


252 


June 


137 


July 


140 


Aug 


262 


Sept. 


75 


Oct 


212 


Nov 


305 


Dec 


182 



1 Data are for licensed banks only. 

' Beginning December 1959, total reserves held include vault cash allowed. 

3 Beginning November 1972, includes $450 million of reserve deficiencies on which Federal Reserve Banks were allowed 
to waive penalties for a transition period in connection with bank adaptation to Regulation J as amended effective Novem- 
ber 9, 1972. Beginning 1973, allowable deficiencies included are (beginning with first statement week of quarter): first 
quarter, $279 million; second quarter, $173 million; third quarter, $112 million; fourth quarter. $84 million. Beginning 
1974, allowable deficiencies included are: first quarter, $67 million and second quarter, $58 million. Transition period 
ended after second quarter 1974. 

4 Effective November 1975, includes reserve deficiencies on which penalties are waived over a 24-month period when a 
nonmember bank merges into an existing member bank, or when a nonmember bank joins the Federal Reserve System 

Source: Board of Governors of the Federal Reserve System. 



256 



Table B-64. — Aggregate reserves and deposits of member banks, 1959-78 
[Averages of daily figures; billions of dollars, seasonally adjusted] 



Year and month 



1959: Dec. 

1960: Dec. 

1961: Dec. 

1962: Dec. 

1963: Dec. 

1964: Dec. 

1965: Dec. 

1966: Dec. 

1967: Dec. 

1968: Dec. 

1969: Dec. 

1970: Dec. 
1971: Dec. 
1972: Dec. 
1973: Dec. 
1974: Dec. 

1975: Dec. 
1976: Dec. 
1977: Dec. 
1978: Dec » 

1977: Jan.. 
Feb.. 
Mar.. 
Apr.. 
May. 
June. 

July.. 
Aug.. 
Sept. 
Oct.. 
Nov.. 
Dec. 

1978: Jan.. 
Feb.. 
Mar.. 
Apr.. 
May.. 
June. 

July.. 
Aug.. 
Sept. 
Oct.. 
Nov. 
Dec 



Member bank reserves ' 



Total 



18.63 

18.92 
19.75 
19.66 
20.31 
21.19 

22.18 
23.28 
24.76 
27.06 
27.99 

29.11 
31.17 
31.34 
34.91 
36.57 

34.68 
34.93 
36.14 
41.54 

34.56 
34.54 
34.54 
34.76 
34.80 
34.82 

35.27 
35.50 
35.52 
35.81 
35.96 
36.14 

36.61 
36.93 
36.67 
36.95 
37.26 
37.73 

38.19 
37.91 
38.17 
38.43 
39.73 
41.54 



Non- 
borrowed 



17.68 

18.84 
19.61 
19.40 
19.98 
20.92 

21.74 
22.75 
24.54 
26.31 
26.87 

28.78 
31.04 
30.29 
33.61 
35.84 

34.55 
34.88 
35.57 
40.67 

34.49 
34.46 
34.43 
34.69 
34.59 
34.55 

34.95 
34.44 
34.89 
34.50 
35.10 
35.57 

36.12 
36.52 
36.34 
36.39 
36.05 
36.63 

36.88 
36.77 
37.11 
37.15 
39.03 
40.67 



Required 



18.12 

18.17 
19.16 
19.08 
19.82 
20.78 

21.76 
22.94 
24.39 
26.63 
27.70 

28.86 
30.98 
31.06 
34.61 
36.31 

34.42 
34.66 
35.95 
41.27 

34.29 
34.34 
34.32 
34.57 
34.59 
34.67 

35.00 
35.30 
35.31 
35.60 
35.71 
35.95 

36.34 
36.69 
36.47 
36.80 
37.04 
37.55 

38.00 
37.74 
37.97 
38.26 
39.50 
41.27 



Member bank deposits subject to reserve 
requirements' 



Total 



158.2 

162.5 
175.5 
189.0 
203.2 
218.7 

238.3 
246.3 
275.7 
299.8 
287.8 

321.1 
360.2 
402.0 
442.2 
486.1 

504.6 
529.0 
569.1 
617.3 

532.5 
533.4 
536.1 
538.4 
538.7 
543.4 

547.2 
550.5 
553.0 
558.5 
564.4 
569.1 

575.8 
577.9 
582.1 
586.0 
592.0 
595.6 

600.3 
601.1 
606.4 
608.1 
617.3 
617.3 



Time 

and 

savings 



54.3 

58.8 
67.7 
79.9 
92.1 
103.7 

120.7 
128.7 
148.9 
164.5 
150.5 

178.8 
210.5 
241.6 
279.2 
322.1 

337.1 
354.3 
387.0 
429.7 

357.3 
360.1 
361.3 
361.4 
364.1 
366.3 

368.9 
370.8 
373.0 
377.1 
383.5 
387.0 

390.5 
395.4 
399.2 
400.7 
406.0 
407.1 

410.5 
411.4 
416.0 
417.5 
427.9 
429.7 



Demand 



Private 



99.0 

99.1 
102.9 
103.3 
105.9 
109.1 

112.8 
113.9 
121.3 
130.5 
132.1 

136.1 
144.0 
154.4 
158.1 
160.6 

164.5 
171.5 
178.5 
185.2 

172.3 
170.5 
171.7 
173.3 
172.4 
173.8 

175.3 
176.5 
176.7 
178.3 
178.0 
178.5 

182.2 
179.5 
179.5 
182.0 
183.4 
184.6 

186.1 
186.5 
186.3 
187.2 
187.2 
185.2 



U.S. Gov- 
ernment 



4.8 



4.6 
4.9 
5.7 
5.2 
5.9 

4.9 
3.7 
5.5 
4.9 
5.2 

6.2 
5.8 
6.1 
4.9 
3.3 

2.9 
3.2 
3.6 
2.4 

2.9 
2.9 
3.1 
3.7 
2,3 
3.2 

3.0 
3.2 
3.3 
3.1 
3.0 
3.6 

3.1 
3.0 
3.4 
3.3 



4.1 
3.5 
2.3 
2.4 



1 Series reflects actual reserve requirement percentages with m adjustment to eliminate the effect of changes in 
Regulations D and M. 

2 Includes total time and savings deposits and net demand deposits as defined by Regulation D. Private demand deposits 
include all demand deposits except those due to the U.S. Government, less cash items in process of collection and demand 
balances due from domestic commercial banks. 

Source: Board of Governors of the Federal Reserve System. 



257 



Table B-65. — Bond yields and interest rates, 1929-78 
[Percent per annum] 





U.S 


. Treasury 


securities 


Corporate 

bonds 
(Moody's) 


High- 
grade 
munic- 
ipal 
bonds 
(Stand- 
ard & 
Poor's) 


New- 
home 
mort- 
gage 
yields 
(FHLBB) 
<•) 


Prime 
com- 
mer- 
cial 
paper, 
4-6 
months 


Prime 

rate 

charged 

by 
banks 4 


Dis- 
count 

rate, 
Federal 
Reserve 

Bank 
of New 

York* 






Bills 
(new 
issues) 1 


Constant 
maturi- 
ties ' 


Federal 


Year or 
month 


/aa 


Baa 


funds 
rate* 




3- 

month 


6- 
month 


3 
years 


10 
years 




1929 










4.73 

4.49 

3.01 

2.84 
2.77 
2.83 
2.73 
2.72 

2.62 
2.53 
2.61 
2.82 
2.66 

2.62 
2.86 
2.96 
3.20 
2.90 

3.06 
3.36 
3.89 
3.79 
4.38 

4.41 
4.35 
4.33 
4.26 
4.40 

4.49 
5.13 
5.51 
6.18 
7.03 

8.04 
7.39 
7.21 
7.44 
8.57 

8.83 
8.43 
8.02 
8.73 


5.90 

7.76 

4.96 

4.75 
4.33 
4.28 
3.91 
3.61 

3.29 
3.05 
3.24 
3.47 
3.42 

3.24 
3.41 
3.52 
3.74 
3.51 

3.53 
3.88 
4.71 
4.73 
5.05 

5.19 
5.08 
5.02 
4.86 
4.83 

4.87 
5.67 
6.23 
6.94 
7.81 

9.11 

8.56 
8.16 
8.24 
9.50 

10.61 
9.75 
8.97 
9.49 


4.27 

4.71 

2.76 

2.50 
2.10 
2.36 
2.06 
1.86 

1.67 
1.64 
2.01 
2.40 
2.21 

1.98 
2.00 
2.19 
2.72 
2.37 

2.53 
2.93 
3.60 
3.56 
3.95 

3.73 
3.46 
3.18 
3.23 
3.22 

3.27 
3.82 
3.98 
4.51 
5.81 

6.51 
5.70 
5.27 
5.18 
6.09 

6.89 
6.49 
5.56 
5.90 


5.89 
5.82 

5.81 
6.25 
6.46 
6.97 
7.80 

8.45 
7.74 
7.60 
7.95 
8.92 

9.01 
8.99 
9.01 
9.54 


5.85 

1.73 

.59 

.56 
.53 
.66 
.69 
.73 

.75 

.81 

1.03 

1.44 

1.49 

1.45 
2.16 
2.33 
2.52 
1.58 

2.18 

3.31 
3.81 
2.46 
3.97 

3.85 
2.97 
3.26 
3.55 
3.97 

4.38 
5.55 
5.10 
5.90 
7.83 

7.72 
5.11 
4.69 
8.15 
9.87 

6.33 
5.35 
5.60 
7.99 




5.16 

2.56 

1.00 

1.00 

1.00 

« 1.00 

»1.00 

•1.00 

«1.00 

•1.00 

1.00 

1.34 

1.50 

1.59 
1.75 
1.75 
1.99 
1.60 

1.89 
2.77 
3.12 
2.15 
3.36 

3.53 

3.00 
3.00 
3.23 
3.55 

4.04 
4.50 
4.19 
5.17 
5.87 

5.95 
4.88 
4.50 
6.45 
7.83 

6.25 
5.50 
5.46 
7.46 




1933 

1939 

1940 
1941 
1942 
1943 
1944 

1945 
1946 
1947 


0.515 

.023 

.014 
.103 
.326 
.373 
.375 

.375 
.375 
.594 
1.040 
1.102 

1.218 
1.552 
1.766 
1.931 
.953 

1.753 
2.658 
3.267 
1.839 
3.405 

2.928 
2.378 
2.778 
3.157 
3.549 

3.954 
4.881 
4.321 
5.339 
6.677 

6.458 
4.348 
4.071 
7.041 
7.886 

5.838 
4.989 
5.265 
7.221 






































































































1948 
1949 


















2.00 

2.07 
2.56 
3.00 
3.17 
3.05 

3.16 
3.77 
4.20 
3.83 
4.48 

4.82 
4.50 
4.50 
4.50 
4.50 

4.54 
5.63 
5.61 
6.30 
7.96 

7.91 

5.72 
5.25 
8.03 
10.81 

7.86 
6.84 
6.83 
9.06 




1950 










1951 










1952 










1953 
1954 

1955 
1956 
1957 
1958 
1959 

1960 
1961 
1962 
1963 
1964 

1965 
1966 
1967 
1968 
1969 

1970 
1971 
1972 
1973 
1974 

1975 
1976 
1977 
1978 


3.832 

3.247 
2.605 
2.908 
3.253 
3.686 

4.055 
5.082 
4.630 
5.470 
6.853 

6.562 
4.511 
4.466 
7.178 
7.926 

6.122 
5.266 
5.510 
7.572 


2.47 

1.63 

2.47 
3.19 
3.98 
2.84 
4.46 

3.98 
3.54 
3.47 
3.67 
4.03 

4.22 

5.23 
5.03 
5.68 
7.02 

7.29 
5.65 
5.72 
6.95 
7.82 

7.49 

6.77 
6.69 
8.29 


2.85 
2.40 

2.82 
3.18 
3.65 
3.32 
4.33 

4.12 

3.88 
3.95 
4.00 
4.19 

4.28 
4.92 
5.07 
5.65 
6.67 

7.35 
*6.16 
6.21 
6.84 
7.56 

7.99 
7.61 
7.42 
8.41 


1.78 
2.73 
3.11 
1.57 
3.30 

3.22 

1.96 
2.68 
3.18 
3.50 

4.07 

5.11 
4.22 
5.66 
8.22 

7.17 
4.67 
4.44 
8.74 
10.51 

5.82 
5.05 
5.54 
7.94 



See next page for continuation of table. 



258 



Table B-65. — Bond yields and interest rates, 1929-78 — Continued 
(Percent per annum] 





U.S. Treasury securities 


Corporate 

bonds 


High- 
grade 

munic- 
ipal 
bonds 

(Stand- 
ard & 

Poor's) 


New- 
home 
mort- 
gage 
yields 
(FHLBB) 
(?) 


Prime 
com- 
mer- 
cial 
paper, 
4-6 
months 


Prime 

rate 

charged 

by 

banks 4 


Dis- 
count 
rate, 
Federal 
Reserve 
Bank 
of New 
York* 






Bills 

(new 
issues) 1 


Constant 
maturi- 
ties 2 


(Moody's) 


Federal 


Year or 
month 


Aaa 


Baa 


funds 
rate » 




3- 

month 


6- 
month 


3 
years 


10 
years 




1976: 


























Jan 


4.961 


5.238 


6.99 


7.74 


8.60 


10.41 


6.80 


8.99 


5.27 


7V Vi 


6 -5>$ 


4.87 


Feb... 


4.852 


5.144 


7.06 


7.79 


8.55 


10. 24 


6.91 


8.93 


5.23 


Wat 6Ji 


5H-5H 


4.77 


Mar... 


5.047 


5.488 


7.13 


7.73 


8.52 


10.12 


6.86 


8.93 


5.37 


&A- WA 


5J4-5H 


4.84 


Apr... 


4.878 


5.201 


6.84 


7.56 


8.40 


9.94 


6.62 


8.92 


5.23 


S%- VA 


5^-5^ 


4.82 


May... 


5.185 


5.600 


7.27 


7.90 


8.58 


9.86 


6.87 


8.97 


5.54 


VA-VA 


5J^-5H 


5.29 


June.. 


5.443 


5.784 


7.32 


7.86 


8.62 


9.89 


6.85 


8.89 


5.94 


7 -I'A 


5^-5J^ 


5.48 


July... 


5.278 


5.597 


7.12 


7.83 


8.56 


9.82 


6.64 


8.97 


5.67 


IVx- IVx 


5VS-5J4 


5.31 


Aug... 


5.153 


5.416 


6.86 


7.77 


8.45 


9.64 


6.28 


9.02 


5.47 


7> 4 - 7 


5^-5^ 


5.29 


Sept... 


5.075 


5.311 


6.66 


7.59 


8.38 


9.40 


6.20 


9.08 


5.45 


7 - 7 


5H-5M- 


5.25 


Oct.._. 


4.930 


5.073 


6.24 


7.41 


8.32 


9.29 


6.06 


9.07 


5.22 


7 - 6« 


5J^-5^ 


5.03 


Nov. .. 


4.810 


4.944 


6.09 


7.29 


8.25 


9.23 


6.05 


9.05 


5.05 


6H-6J^ 


5VS-5U 


4.95 


Dec .. 


4.355 


4.513 


5.68 


6.87 


7.98 


9.12 


5.69 


9.10 


4.70 


6M- 6)i 


VA-VA 


4.65 


1977: 
Jan 


4.597 


4.783 


6.22 


7.21 


7.96 


9.08 


5.70 


9.05 


4.74 


6> 4 - 6', 


VA-VA 


4.61 


Feb... 


4.662 


4.896 


6.44 


7.39 


8.04 


9.12 


5.75 


8.99 


4.82 


SH- 6> 4 


VA-Vi 


4.68 


Mar _ .. 


4.613 


4.883 


6.47 


7.46 


8.10 


9.12 


5.76 


8.95 


4.87 


6> 4 - 6' 4 


5' 4 -5> 4 


4.69 


Apr... 


4.540 


4.790 


6.31 


7.37 


8.04 


9.07 


5.61 


8.94 


4.87 


6' 4- 6' 4 


5' 4 -5' 4 


4.73 


May... 


4.942 


5.193 


6.55 


7.46 


8.05 


9.01 


5.64 


8.96 


5.35 


6' 4 - 6J-4 


5' 4 -5'4 


5.35 


June. . 


5.004 


5.198 


6.39 


7.28 


7.95 


8.91 


5.53 


8.98 


5.49 


6^ 4 - 6* 4 


5' 4-5 '4 


5.39 


July... 


5.146 


5.351 


6.51 


7.33 


7.94 


8.87 


5.50 


9.00 


5.41 


6?i- s*a 


5M-5J* 


5.42 


Aug... 


5.500 


5.810 


6.79 


7.40 


7.98 


8.82 


5.46 


9.02 


5.84 


Wat 7 


5 l 4-5 3 4 


5.90 


Sept... 


5.770 


5.991 


6.84 


7.34 


7.92 


8.80 


5.37 


9.04 


6.17 


7 - 7' 4 


5 3 4-5-% 


6.14 


Oct.... 


6.188 


6.410 


7.19 


7.52 


8.04 


8.89 


5.53 


9.07 


6.55 


Wat 7} 4 


5?4-6 


6.47 


Nov... 


6.160 


6.433 


7.22 


7.58 


8.08 


8.95 


5.38 


9.07 


6.59 


W*r 7 Z A 


6 -6 


6.51 


Dec... 


6.063 


6.377 


7.30 


7.69 


8.19 


8.99 


5.48 


9.09 


6.64 


7?4- 75 4 


6 -6 


6.56 


1978: 
Jan 


6.448 


6.685 


7.61 


7.96 


8.41 


9.17 


5.60 


9.15 


6.79 


7 3 i- 8 


6 -6H 


6.70 


Feb.... 


6.457 


6.740 


7.67 


8.03 


8.47 


9.20 


5.51 


9.18 


6.80 


8-8 


6J4-6H 


6.78 


Mar 


6.319 


6.644 


7.70 


8.04 


8.47 


9.22 


5.49 


9.26 


6.80 


8-8 


W2W2 


6.79 


Apr 


6.306 


6.700 


7.85 


8.15 


8.56 


9.32 


5.71 


9.30 


6.86 


8-8 


6^-sy 2 


6.89 


May... 


6.430 


7.019 


8.07 


8.35 


8.69 


9.49 


5.97 


9.37 


7.11 


8 - %y 2 


6K-7 


7.36 


June... 


6.707 


7.200 


8.30 


8.46 


8.76 


9.60 


6.13 


9.46 


7.63 


8M-9 


7 -7 


7.60 


July... 


7.074 


7.471 


8.54 


8.64 


8.88 


9.60 


6.18 


9.57 


7.91 


9-9 


7 -7' 4 


7.81 


Aug... 


7.036 


7.363 


8.33 


8.41 


8.69 


9.48 


5.98 


9.70 


7.90 


9 - 9' 4 


7>i-7 3 4 - 


8.04 


Sept... 


7.836 


7.948 


8.41 


8.42 


8.69 


9.42 


5.93 


9.73 


8.44 


9V 9 3 4 


7 3 4-8 


8.45 


Oct.... 


8.132 


8.493 


8.62 


8.64 


8.89 


9.59 


5.95 


9.83 


9.03 


9V10' 4 


8 -%y 2 


8.96 


Nov... 


8.787 


9.204 


9.04 


8.81 


9.03 


9.83 


6.03 


9.87 


10.23 


ioy 2 -WA 


W2-W2 


9.76 


Dec... 


9.122 


9.397 


9.33 


9.01 


9.16 


9.94 


6.33 


10.02 


10.43 


11' • 11*4 


9h-9M; 


10.03 



1 Rate on now issues within period. 

2 Yields on the more actively traded issues adjusted to constant maturities by the Treasury Department. 

3 Effective rate (in the primary market) on conventional mortgages, reflecting fees and charges as well as contract rate 
and assumed, on the average, repayment at end of 10 years. Rates beginning January 1973 not strictly comparable with 
prior rales. 

* Average effective rate for the year; opening and closing rate for the month. 

5 Based on seven-day averages of daily effective rates for weeks ending Wednesday. Since July 19, 1975, the daily 
effective rate is an average of the rates on a given day weighted by the volume of transactions at these rates. Prior to 
that date, the daily effective rate was the rate considered most representative of the day's transactions, usually the one 
at which most transactions occurred. 

• From October 30, 1942, to April 24, 1946, a preferential rate of 0.50 percent was in effect for advances secured by 
Government securities maturing in 1 year or less. 

Sources: Department of the Treasury, Board of Governors of U\e Federal Reserve System, Federal Home Loan Bank 
Board (FHLBB), Moody's Investors Service, and Standard & Poor's Corporation. 



259 



Table B-66. — Consumer installment credit, 1970-78 
(Millions of dollars; monthly data seasonally adjusted] 



Year or month 


Installment credit 
extended 


Installment credit 
liquidated 


Net change in amount 
outstanding 




Total i 


Auto- 
mobile 


Revolv- 
ing 


Total i 


•Auto- 
mobile 


Revolv- 
ing 


Total i 


Auto- 
mobile 


Revolv- 
ing 


1970 


115,132 
138,046 
151,749 
173,035 
172, 765 

180,441 
211,028 
254,071 
298, 700 

19, 379 

19, 927 

20, 802 
20, 953 
20, 991 
20, 764 

20, 796 
21,408 

21, 528 
22,273 
22,487 

22, 832 

21,983 

22, 758 

23, 925 

24, 682 
25, 104 

25, 565 

25, 022 
25, 669 
25, 537 
25, 758 
26,214 
26,033 


30, 857 
3b, 706 
43, 702 
49, 606 
46,514 

52, 420 
63, 743 
75,641 
88, 900 

5,797 
6,006 
6,261 
6,182 
6,184 
6,212 

6,293 
6,332 
6,413 
6,503 
6,719 
6,889 

6,541 
6,730 
7,043 
7,434 
7,592 
7,595 

7,652 
7,744 
7,542 
7,501 
7,787 
7,725 


8,689 
21,862 
24, 659 
28, 702 
33,213 

36, 956 
43, 934 
86, 756 
104, 993 

6,395 
6,724 
6,929 
7,124 
7,340 
7,199 

7,010 
7,275 
7,333 
7,666 
7,716 
7,985 

7,960 
8,147 
8,398 
8,523 
8,563 
9,062 

8,700 
9,028 
9,006 
8,846 
9,176 
9,112 


110,352 
127, 789 
136, 787 
152,817 
163, 276 

172,676 
189, 381 
218,793 
254, 300 

17,272 
17, 566 

17, 434 
17,864 

18, 091 
18, 200 

18, 389 

18, 473 
18,683 

19, 066 

18, 891 

19, 252 

19, 546 
19, 896 

19, 849 

20, 576 

20, 824 

21, 358 

21,556 

22, 037 
21,857 
22, 384 
22,115 
22, 308 


31,414 
32, 512 
38, 081 
43, 696 
46,019 

49, 444 
53, 278 
60, 437 
69, 700 

4,795 
4,855 
4,885 
4,954 
4,937 
5,089 

5,135 
5,094 
5,082 
5,274 
5,179 
5,252 

5,215 
5,397 
5,409 
5,622 
5,715 
5,953 

5,941 
6,140 
6,010 
6,126 
6,032 
6,125 


7,278 
20,818 
23, 485 
26, 699 
31,243 

35,616 
41, 764 
80, 508 
97,515 

6,412 
6,429 
6,275 
6,503 
6,717 
6,690 

6,730 
6,795 
6,865 
6,999 
7,024 
7,226 

7,545 
7,698 
7,566 
7,840 
7,919 
8,107 

8,100 
8,291 
8,384 
8,500 
8,511 
8,582 


4,780 
10,257 
14,962 
20,218 

9,489 

7,765 
21,647 
35, 278 
44, 400 

2,107 
2,361 
3,368 
3,089 
2,900 
2,564 

2,407 
2,935 
2,845 
3,207 
3,596 
3,579 

2,437 
2,862 
4,076 
4,106 
4,280 
4,207 

3,466 
3,632 
3,680 
3,374 
4,099 
3,725 


-557 
4,194 
5,621 
5,910 
495 

2,976 
10, 465 
15,204 
19, 200 

1,002 
1,151 
1,376 
1,228 
1,247 
1,123 

1,158 
1,238 
1,331 
1,229 
1,540 
1,637 

1,326 
1,333 
1,634 
1,812 
1,877 
1,642 

1,711 
1,604 
1,532 
1,375 
1,755 
1,600 


1,411 


1971 


1,044 


1972 - 


1,174 


1973 


2,003 


1974 - - 


1,970 


1975 


1,340 


1976 --- 


2,170 


1977 - 


6,248 


1978 2 - 


7,478 


1977: Jan 


-17 


Feb - 


295 




654 




621 




623 




509 


July 


280 




480 


Sept 


468 


Oct 


667 


Nov 


692 


Dec 


758 


1978: Jan 


415 


Feb 


449 




832 


Apr 


683 


May 


644 




955 


July 


600 


Aug 


737 


Sept 


622 


Oct 


346 


Nov 


665 


Dec 1 


530 







1 Includes other categories not shown separately. 

2 Preliminary; December by Council of Economic Advisers. 

Note: Consumer installment credit consists of short- and intermediate-term credit extended through regular business 
channels to finance the purchase of goods and services for personal consumption, or to refinance debts incurred for such 
purposes, and scheduled to be repaid in two or more installments. Mortgage credit generally is excluded. 

Source: Board of Governors of the Federal Reserve System (except as noted). 



260 



Table B-67. — Mortgage debt outstanding by type of property and of financing, 1939-78 

[Billions of dollars] 



All 

prop- 
erties 



35.5 

36.5 
37.6 
36.7 
35.3 
34.7 

35.5 
41.8 
48.9 
56.2 
62.7 

72.8 
82.3 
91.4 
101.3 
113.7 

129.9 
144.5 
156.5 
171.8 
190.8 

207.5 
228.0 
251.4 
278.5 
305.9 

333.3 
356.5 
381.2 
410.9 
441.4 

474.2 
526.5 
603.4 
682.3 
742.5 

801.5 

889.2 

1,023.4 

818.4 
840.5 
865.6 
889.2 

912.2 

950.5 

988.5 

1,023.4 

1,050.2 
1,091.5 
1,131.9 



Farm 
prop- 
erties 



Nonfarm properties 



6.6 

6.5 

6.4 
6.0 
5.4 
4.9 

4.8 
4.9 
5.1 
5.3 
5.6 

6.1 
6.7 
7.2 
7.7 
8.2 

9.0 
9.8 
10.4 
11.1 
12.1 

12.8 
13.9 
15.2 
16.8 
18.9 

21.2 
23.1 
25.1 
27.4 
29.2 

30.3 
32.2 
35.8 
41.3 
46.3 

50.9 
57.0 
65.7 

52.2 

53.8 
55.5 
57.0 

59.2 
61.9 
64.0 
65.7 

68.1 
70.9 
73.8 



Total 



28.9 

30.0 
31.2 
30.8 
29.9 
29.7 

30.8 
36.9 
43.9 
50.9 
57.1 

66.7 
75.6 
84.2 
93.6 
105.4 

120.9 
134.6 
146.1 
160.7 
178.7 

194.7 
214.1 
236.2 
261.7 
287.0 

312.1 
333.4 
356.1 
383.5 
412.2 

443.8 
494.3 
567.7 
641.1 
696.2 

750.7 
832.2 
957.7 

766 2 
786.7 
810.2 
832.2 

853.0 
888.6 
924.5 
957.7 

982.1 
1,020.6 
1, 058. 1 



1- to 4- 
family 
houses 



16.3 

17.4 
18.4 
18.2 
17.8 
17.9 

18.6 
23.0 
28.2 
33.3 
37.6 

45.2 
51.7 
58.5 
66.1 
75.7 

88.2 
99.0 
107.6 
117.7 
130.9 

141.9 

154.7 
169.3 
186.4 
203.4 

220.5 
232.9 
247.3 
264.8 
282.8 

298.1 
328.3 
372.2 
416.2 
449.4 

490.8 
556.5 
657.2 

503.3 
519.8 
538.8 
556.5 

573.7 
603.2 
632.7 
657.2 



Multi- 
family 
prop- 
erties 



5.6 

5.7 
5.9 
5.8 
5.8 
5.6 

5.7 
6.1 
6.6 
7.5 
8.6 

10.1 
11.5 
12.3 
12.9 
13.5 

14.3 
14.9 
15.3 
16.8 
18.7 

20.3 
23.0 
25.8 
29.0 
33.6 

37.2 
40.3 
43.9 
47.3 
52.3 

60.1 

70.1 
82.8 
93.1 
100.0 

100.6 
104.5 
111.5 

101.8 
102.9 
103.9 
104.5 

105.3 
107.6 
109.5 
111.5 



674.8 113.9 
704.5 , 116.5 
731.7 119.2 



Com- 
mer- 
cial 
prop- 
erties' 



7.0 

6.9 
7.0 
6.7 
6.3 
6.2 

6.4 
7.7 
9.1 
10.2 
10.8 

11.5 
12.5 
13.4 
14.5 
16.3 

18.3 

20.7 
23.2 
26.1 
29.2 

32.4 
36.4 
41.1 
46.2 
50.0 

54.5 
60.1 
64.8 
71.4 
77.1 

85.6 
95.9 
112.7 
131.7 
146.9 

159.3 
171.2 
189.0 

161.2 
164.0 
167.5 
171.2 

174.0 
177.8 
182.3 
189.0 

193.4 
199.6 
207.1 



Nonfarm properties by type of mortgage 



Government underwritten 



Total J 



1.8 

2.3 
3.0 
3.7 
4.1 
4.2 

4.3 
6.3 
9.8 
13.6 
17.1 

22.1 
26.6 
29.3 
32.1 
36.2 

42.9 

47.8 
51.6 
55.1 
59.3 

62.3 
65.6 
69.4 
73.4 
77.2 

81.2 
84.1 
88.2 
93.4 
100.2 

109 2 
120.7 
131.1 
135.0 
140.2 

147.0 
154.1 
161.7 

148.3 
150.5 
150.8 
154.1 

155.7 
158.7 
161.6 
161.7 

165.3 
167.4 
174.7 



1- to 4-family houses 



Total 



1.8 

2.3 
3.0 

3.7 
4.1 
4.2 

4.3 
6. 1 
9.3 
12.5 

15.0 

18.9 

22.9 
25.4 
28.1 
32.1 

38.9 
43.9 
47.2 
50.1 
53.8 

56.4 
59.1 
62.2 
65.9 
69.2 

73.1 
76.1 
79.9 
84.4 
90.2 

97.3 
105.2 
113.0 
116.2 
121.3 

127.7 
133.5 
141.6 

129.1 
131.2 
131.2 
133.5 

134.9 
137.4 
139.9 
141.6 

144.7 
146.7 
150.7 



FHA 
in- 
sured 



1.8 

2.3 
3.0 
3.7 

4.1 
4.2 

4.1 
3.7 
3.8 
5.3 
6.9 

8.6 
9.7 
10.8 
12.0 
12.8 

14.3 
15.5 
16.5 
19.7 
23.8 

26.7 
29.5 
32.3 
35.0 
38.3 

42.0 

44.8 
47.4 
50.6 
54.5 

59.9 
65.7 
68.2 
66.2 
65.1 

66.1 
66.5 
68.0 

66.2 
67.1 
66.4 
66.5 



VA 
guar- 
anteed 



0.2 
2.4 
5.5 

7.2 
8.1 

10.3 
13.2 
14.6 
16.1 
19.3 

24.6 
28.4 
30.7 
30.4 
30.0 

29.7 
29.6 
29.9 
30.9 
30.9 

31.1 
31.3 
32.5 
33.8 
35.7 

37.3 
39.5 
44.7 
50.0 
56.2 

61.6 
67.0 
73.6 

62.9 
61.1 
64.8 
67.0 



Conventional 3 



1- to 4- 
Total family 
houses 



66.9 


68.0 


67.8 


69.6 


67.9 


71.9 


68.0 


73.6 


68.6 


76.1 


69.2 


77.6 


69.9 


80.8 



27.1 

27.7 
28.2 
27.1 
25.8 
25.5 

26.5 
30.6 
34.1 
37.3 
40.0 

44.6 
49.0 
51.9 
61.5 
69.2 

78.0 
86.8 
94.6 
105.5 
119.4 

132.3 
148.5 
166.9 
188.2 
209.8 

231.0 
249.3 
267.9 
290.1 
312.0 

334.6 
373.5 

436.5 
506.0 
556.0 

603.7 
678.0 
796.0 

617.9 
636.2 
659.4 
678.0 

697.3 
730.0 
763.0 
796.0 

816.9 
853.2 
883.4 



1 Includes negligible amount of farm loans held by savings and loan associations. 
- Includes FHA insured multifamily properties, not shown separately. 

2 Derived figures. Total includes multifamily and commercial properties, not shown separately. 

Source: Board of Governors of the Federal Reserve System, estimated and compiled trom data supplied by various 
Government and private organizations. 



261 



Table B-68. — Mortgage debt outstanding by holder, 1939-78 
[Billions of dollars] 



End of year 
or quarter 



1939. 

1940. 
1941. 
1942. 
1943. 
1944. 

1945. 
1946. 
1947. 
1948. 
1949. 

1950. 
1951. 
1952. 
1953. 
1954. 

1955. 
1956. 
1957. 
1958. 
1959. 

1960. 
1961. 
1962. 
1963. 
1964. 

1965. 
1966. 
1967. 
1968. 
1969. 



1970.. 
1971.. 
1972.. 
1973.. 
1974.. 

1975.. 
1976.. 
1977.. 



1976: I. 



1977: I. 



III. 

IV. 

1978: I... 
II.. 
III. 



Total 



35.5 

36.5 
37.6 
36.7 
35.3 
34.7 

35.5 

41.8 
48.9 
56.2 
62.7 

72.8 
82.3 
91.4 
101.3 
113.7 

129.9 
144.5 
156.5 
171.8 
190.8 

207.5 
228.0 
251.4 
278.5 
305.9 

333.3 
356.5 
381.2 
410.9 
441.4 

474.2 
526.5 
603.4 
682.3 
742.5 

801.5 

889.2 

1,023.4 

818.4 
840.5 
865.6 
889.2 

912.2 

950.5 

988.5 

1,023.4 

1, 050. 2 
1,091.5 
1,131.9 



Major financial institutions 



Total 



18.6 

19.5 

20.7 
20.7 
20.2 
20.2 

21.0 
26.0 
31.8 
37.8 
42.9 

51.7 

59.5 
66.9 
75.1 
85.7 

99.3 
111.2 
119.7 
131.5 
145.5 

157.6 
172.6 
192.5 
217.1 
241.0 

264.6 
280.8 
298.8 
319.9 
339.1 

355.9 
394.2 
450.0 
505.4 
542.6 

581.2 
647.5 
745.0 

593.2 
611.5 
630.0 
647.5 

662.8 
690.5 
717.9 
745.0 

764.6 
794.0 
822.2 



Savings 
and 
loan 

associa- 
tions 



3.8 

4.1 
4.6 
4.6 
4.6 
4.8 

5.4 
7.1 
8.9 
10.3 
11.6 

13.7 
15.6 
18.4 
22.0 
26.1 

31.4 
35.7 
40.0 
45.6 
53.1 

60.1 
68.8 
78.8 
90.9 
101.3 

110.3 
114.4 
121.8 
130.8 
140.2 

150.3 
174.3 
206.2 
231.7 
249.3 

278.6 
323.0 
381.2 

286.3 
299.2 
311.8 
323.0 

333.6 
350.6 
366.6 
381.2 

392.4 
408.0 
421.0 



Mutual 
savings 
banks 



4.8 

4.9 
4.8 
4.6 
4.4 
4.3 

4.2 
4.4 
4.9 
5.8 
6.7 

8.3 
9.9 
11.4 
12.9 
15.0 

17.5 
19.7 
21.2 
23.3 
25.0 

26.9 
29.1 
32.3 
36.2 
40.6 

44.6 
47.3 
50.5 
53.5 
56.1 

57.9 

62.0 
67.6 
73.2 
74.9 

77.2 
81.6 
88.1 

77.9 
78.8 
80.2 
81.6 

82.3 

84.1 
86.1 
88.1 



91.5 
93.4 



Com- 
mercial 
banks 1 



4.3 

4.6 
4.9 
4.7 
4.5 
4.4 

4.8 
7.2 
9.4 

10.9 
11.6 

13.7 

14.7 
15.9 
16.9 
18.6 

21.0 
22.7 
23.3 
25.5 
28.1 

28.8 
30.4 
34.5 
39.4 
44.0 

49.7 

54.4 
59.0 
65.7 
70.7 

73.3 

82.5 

99.3 

119.1 

132.1 

136.2 
151.3 
179.0 

139.6 
143.7 
147.8 
151.3 

155.2 
163.0 
171.2 
179.0 

184.4 
194.5 
205.4 



Life 
insurance 
com- 
panies 



5.7 

6.0 
6.4 
6.7 
6.7 
6.7 

6.6 
7.2 
8.7 
10.8 
12.9 

16.1 
19.3 
21.3 
23.3 
26.0 

29.4 

33.0 
35.2 
37.1 
39.2 

41.8 
44.2 
46.9 
50.5 
55.2 

60.0 
64.6 
67.5 
70.0 
72.0 

74.4 
75.5 
76.9 
81.4 
86.2 

89.2 
91.6 
96.8 

89.4 
89.7 
90.2 
91.6 

91.8 

92.9 
94.1 
96.8 

98.0 

100.0 
102.4 



Other holders 



Federal 

and 

related 

agencies 5 



5.0 

4.9 
4.7 
4.3 
3.6 
3.0 

2.4 
2.0 
1.8 
1.8 
2.3 

2.8 
3.5 
4.1 
4.6 
4.8 

5.3 
6.2 
7.7 
8.0 
10.2 

11.5 
12.2 
12.6 
11.8 
12.2 

13.5 
17.5 
20.9 
25.1 
31.1 

38.3 

46.4 
54.6 
64.8 
82.1 

101.0 
116.6 
140.3 

105.0 
107.3 
112.3 
116.6 

121.5 
127.1 
133.7 
140.3 

146.1 
152.6 

160.8 



1 Includes loans held hy nondeposit trust companies, but not by bank trust departments. 

2 Includes lormer Federal National Mortgage Association (FNMA) and new Government National Mortgage Associate 
(GNMA), as well as Federal Housing Administration, Veterans Administration, Public Housing Administration, Farmers 
Home Administration, and in earlier years Reconstruction Finance Corporation, Homeowners Loan Corporation, and 
Federal Farm Mortgage Corporation. Also includes GNMA Pools and U.S.-sponsoied agencies such as new FNMA, Federal 
Land Banks, and Federal Home Loan Mortgage Corporation. Other U.S. agencies (amounts small or current separate data 
not readily available) included with "individuals and others." 

Source- Board of Governors of the Federal Reserve System, based on data from various Government and private 
organizations. 



262 



GOVERNMENT FINANCE 

Table B-69. — Federal budget receipts and outlays, fiscal years 1929-80 
[Millions of dollars] 



Fiscal year 


Receipts 


Outlays 


Surplus or 
deficit (-) 


1929 


3,862 

1,997 

4,979 

6,361 

8,621 

14, 350 

23, 649 

44, 276 

45,216 
39, 327 

38, 394 
41,774 

39, 437 

39,485 
51,646 
66, 204 
69, 574 
69,719 

65, 469 
74, 547 
79, 990 
79,636 
79, 249 

92, 492 
94, 389 

99,676 
106,560 
112,662 

116,833 
130,856 
149, 552 
153,671 
187, 784 

193,743 
188,392 
208, 649 
232, 225 
264, 932 

280, 997 
300, 005 
81 773 
357, 762 
401, 997 
455, 989 
502, 553 


3,127 

4,598 

8,841 

9,456 
13,634 
35,114 
78. 533 
91,280 

92, 690 
55, 183 
34, 532 
29, 773 
38, 834 

42, 597 
45, 546 
67,721 
76, 107 
70, 890 

68, 509 
70, 460 
76,741 
82, 575 
92, 104 

92,223 
97,795 
106,813 
111,311 
118,584 

118,430 
134,652 
158,254 
178,833 
184, 548 

196, 588 
211,425 
232, 021 
247,074 
269, 620 

326, 185 
366, 439 
94, 729 
402, 725 
450, 836 
493, 368 
531, 566 


734 


1933 - 


-2,602 


1939 


-3, 862 


1940 


-3,095 


1941 ..- 


-5,013 


1942 


-20, 764 


1943 - 


-54,884 


1944 -.- - - 


-47, 004 


1945 


-47,474 


1946 


-15,856 


1947 


3,862 


1948 


12, 001 


1949 -. - 


603 


1950 


-3,112 


1951 


6,100 


1952 -- - -. 


-1,517 


1953 


-6, 533 


1954 


-1,170 


1955 


-3,041 


1956 


4,087 


1957 


3,249 


1958 


-2,939 


1959 


-12,855 


I960 


269 


1961 .. 


-3,406 


1962 


-7,137 


1963 


-4,751 


1964 


-5,922 


1965 


-1,596 


1966 


-3, 796 


1967 


-8, 702 


1968 


-25,161 


1969 


3,236 


1970 


-2,845 


1971... 


-23,033 


1972... 


—23, 373 


1973 


-14,849 


1974 


-4, 688 


1975 


-45, 188 


1976 


-66, 434 




-12,956 


1977 . 


-44, 963 


1978 


-48, 839 


19791 


-37, 379 


1980' - 


-29, 013 







1 Estimates. 

Note.— Under provisions of the Congressional Budget Act of 1974, the fiscal year for the Federal Government shifted 
beginning with fiscal year 1977. Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis; beginning October 
1976 (fiscal year 1977), the fiscal year is on an October 1 September 30 basis. The 3-month period from July 1, 1976, 
through September 30, 1976 is a separate fiscal period known as the transition quarter. 

Data for 1929-39 are according to the administrative budget and those beginning 1940 according to the unified budget. 

Refunds of receipts are excluded from receipts and outlays. 

See "Budget of the United States Government, Fiscal Year 1980" for additional information. 

Sources: Department of the Treasury and Office of Management and Budget. 



263 



Table E-70. — Federal budget receipts, outlays, and debt, fiscal years 1970-80 
[Millions of dollars; fiscal years] 



Description 



BUDGET RECEIPTS AND OUTLAYS: 
Total receipts 



Federal funds 

Trust funds. 

Interfund transactions. 

Total outlays. 



Federal funds 

Trust funds 

Interfund transactions. 



Total surplus or deficit (— ). 



Federal funds. 
Trust funds... 



OUTSTANDING DEBT, END OF PERIOD: 
Gross Federal debt 



Held by Government agencies. 
Held by the public 



Federal Reserve System. 
Other 



BUDGET RECEIPTS. 



Individual income taxes.. 

Corporation income taxes 

Social insurance taxes and contributions... 

Excise taxes 

Estate and gift taxes 

Customs duties 

Miscellaneous receipts: 

Deposits of earnings by Federal Re- 
serve System 

Allother 



BUDGET OUTLAYS 



National defense 

International affairs 

General science, space, and technology 

Energy 

Natural resources and environment 

Agriculture 

Commerce and housing credit 

Transportation 

Community and regional development 

Education, training, employment, and social 

services 

Health 

Income security 

Veterans benefits and services 

Administration of justice 

General government 

General purpose fiscal assistance 

Interest 

Allowances... 

Undistributed offsetting receipts. 



Composition of undistributed offsetting re- 
ceipts: 
Employer share, employee retirement.. 

Interest received by trust funds. 

Rents and royalties on the Outer Conti- 
nental Shelf 



1970 



193,743 

143, 158 
59, 362 
-8, 778 

196, 588 

156, 300 
49, 066 
-8, 778 

-2, 845 

-13,142 
10, 296 



382, 603 

97, 723 
284, 880 

57,714 
227, 166 



193, 743 

90,412 
32, 829 
45, 298 
15, 705 
3,644 
2,430 



3,266 
158 

196, 588 

78, 553 
4,297 
4,507 
990 
3,061 
5,161 
2,108 
7,006 
2,360 

8,625 

13,051 

43, 073 

8,677 

952 

1,888 

536 

18, 309 



Actual 



-6, 567 



-2, 444 
-3, 936 



-187 



1971 


1972 


1973 


188, 392 


208, 649 


232, 225 


133,785 

66, 193 

-11,586 


148, 846 

72, 959 

-13, 156 


161,357 

92, 193 

-21,325 


211,425 


232, 021 


247, 074 


163,651 

59, 360 

-11,586 


178,110 

67, 067 

-13,156 


186, 951 

81, 448 

-21,325 


-23, 033 


-23, 373 


-14,849 


-29, 866 
6,833 


-29, 264 
5,892 


-25, 594 
10, 745 


409, 467 


437, 329 


468, 426 


105,140 
304, 328 


113,559 
323, 770 


125, 381 
343, 045 


65, 518 
238, 810 


71,426 
252, 344 


75, 182 
267, 863 


188, 392 


208, 649 


232, 225 


86, 230 
26, 785 
48, 578 
16,614 
3,735 
2,591 


94, 737 
32, 166 
53,914 
15,477 
5,436 
3,287 


103, 246 

36, 153 

64, 542 

16, 260 

4,917 

3,188 


3,533 
325 


3,252 
381 


3,495 
426 


211,425 


232,021 


247, 074 


75, 808 
4,097 
4,180 
1,031 
3,909 
4,288 
2,358 
8,050 
2,833 


76, 550 
4,693 
4,173 
1,270 
4,235 
5,280 
2,216 
8,388 
3,388 


74, 541 
4,066 
4,030 
1,179 
4,763 
4,852 
924 
9,065 
4,537 


9,839 
14,716 
55, 426 
9,776 
1,299 
2,104 
535 
19, 602 


12,519 

17,467 

63,913 

10, 730 

1,650 

2,449 

673 

20, 563 


12, 735 

18, 832 

72,965 

12,013 

2,131 

2,626 

7,351 

22, 782 


-8, 427 


-8, 137 


-12,318 


-2,611 
-4, 765 


-2, 768 
-5,089 


-2, 927 
-5,436 


-1,051 


-279 


-3, 956 



1974 



264, 932 

181,219 
104,846 
-21,133 

269, 620 

199, 918 

90, 835 

-21, 133 

-4, 688 

-18,699 
14,011 



486, 247 

140, 194 
346, 053 

80, 649 
265, 404 



264, 932 

118,952 
38, 620 
76, 780 
16, 844 
5,035 
3,334 



4,845 
524 

269, 620 

77,781 
5,681 
3,977 
837 
5,670 
2,227 
3,925 
9,172 
4,080 

12, 344 
22,073 
84, 437 

13, 386 
2,462 
3,296 
6,890 

28, 032 



-16,651 



-3,319 
-6, 583 

-6,748 



See next page for continuation of table. 



264 



Table B-70. — Federal budget receipts, outlays, and debt, fiscal years 1970-80 — Continued 

[Millions of dollars; Fiscal years] 



Description 



BUDGET RECEIPTS AND OUTLAYS: 
Total receipts 



Federal funds 

Trust funds. 

Interfund transactions. 

Total outlays 



Federal funds 

Trust funds 

Interfund transactions. 



Total surplus or deficit (— ). 



Federal funds 

Trust funds 

OUTSTANDING DEBT, END OF PERIOD: 

Gross Federal debt 



Held by Government agencies. 
Held by the public 



Federal Reserve System. 
Other 



Actual 



1976 



300, 005 

201, 099 
133, 695 
-34, 789 

366, 439 

269, 943 

131, 286 

-34, 789 

-66, 434 

-68, 843 
2,410 



631,866 

151,566 
480, 300 

94, 714 
385, 586 



Transition 
quarter 



81,773 

54, 085 
32,071 
-4, 383 

94, 729 

65, 089 
34, 023 
-4, 383 

-12,956 

-11,004 
-1,952 



646, 379 

148, 052 
498, 327 

96, 702 
401,625 



1977 



357, 762 

241,312 
152, 763 
-36,313 

402, 725 

295, 772 
143, 267 
-36,313 

-44, 963 

-54, 459 
9,496 



709, 138 

157, 295 
551, 843 

105, 004 
446, 839 



1978 



401, 997 

270, 484 

168, 012 

-36, 498 

450, 836 

332,016 
155,318 
-36, 498 

-48, 839 

-61,533 
12,694 



780, 425 

169, 477 
610,948 

114,955 
495, 983 



Estimate 



1979 



455, 989 

306, 135 
189, 496 
-39, 641 

493, 368 

361,315 
171,694 
-39,641 

-37, 379 

-55, 180 
17,801 



839, 187 

188, 238 
650, 948 



1980 



502, 553 

332, 798 
212, 208 
-42, 452 

531,566 

381,844 

192,175 

-42, 452 

-29,013 

-49, 046 
20, 033 



898, 956 

209, 008 
689, 948 



BUDGET RECEIPTS 

Individual income taxes 

Corporation income taxes 

Social insurance taxes and contributions.. 

Excise taxes 

Estate and gift taxes 

Customs duties 

Miscellaneous receipts: 

Deposits of earnings by Federal Reserve 
System 

Allother 



BUDGET OUTLAYS. 



National defense 

I nternational affairs 

General science, space, and technology 

Energy 

Natural resources and environment 

Agriculture 

Commerce and housing credit 

Transportation. 

Community and regional development 

Education, training, employment, and socal 

services 

Health 

Income security 

Veterans benefits and services 

Administration of justice 

General government 

General purpose fiscal assistance 

Interest 

Allows nces 

Undistributed offsetting receipts 



300, 005 

131,603 

41, 409 

92,714 

16, 963 

5,216 

4,074 



5,451 
2,575 

366, 439 

89, 430 
5,552 
4,370 
3,127 
8,124 
2,504 
3,792 

13,435 
4,709 

18, 737 

33, 448 
127,412 

18,432 
3,320 
3,006 
7,235 

34,511 



81,773 

38, 801 
8,460 

25, 760 
4,473 
1,455 
1,212 



1,500 
112 

94, 729 

22, 307 
2,193 
1,161 

794 
2,532 

581 
1,392 
3,304 
1,340 

5,162 

8,721 

32, 797 

3,962 

859 

883 

2,092 

7,216 



357, 762 

157,626 
54, 892 
108, 688 
17, 548 
7,327 
5,150 



5,908 
622 

402, 725 

97, 501 
4,813 
4,677 
4,172 

10, 000 

5,532 

-44 

14, 636 
6,286 

20, 985 

38, 785 
137,915 

18, 038 
3,600 
3,374 
9,499 

38, 009 



401, 997 

180, 988 

59, 952 

123, 410 

18, 376 

5,285 

6,573 



6,641 
772 

450, 836 

105, 186 
5,922 
4,742 
5,861 
10, 925 
7,731 
3,325 
15,444 
11,000 

26, 463 

43, 676 
146,212 

18,974 
3,802 
3,777 
9,601 

43, 966 



455, 989 

203, 602 
70, 307 
141,789 
18, 395 
5,686 
7,517 



7,600 
1,093 

493, 368 

114,503 
7,312 
5,226 
8,630 

11,207 
6,224 
2,968 

17,449 
9,063 

30, 656 

49, 136 
158, 867 

20, 329 
4,351 
4,413 
8,936 

52, 766 



Composition of undistributed offsetting re- 
ceipts: 

Employer share, employee retirement. 

Interest received by trust funds 

Rents and royalties on the Outer Con- 
tinental Shelf 



-14,704 



-4,242 
-7, 800 

-2, 662 



-2, 567 



-985 
-270 



-1,311 



-15,053 



-4, 548 
-8,131 

-2, 374 



-15,772 



-4, 983 
-8, 530 

-2,259 



-18,670 



-5, 388 
-9, 782 

-3,500 



502, 553 

227, 322 
70, 987 
161,453 
18, 455 
6,011 
8,447 



8,600 
1,278 

531, 566 

125, 830 
8,213 
5,457 
7,878 

11,456 
4,269 
3,390 

17, 609 
7,281 

30,210 

53, 379 
179, 120 

20,461 
4,388 
4,412 
8,814 

57, 022 

1,398 

-19,021 



-5,482 
-10,940 

-2, 600 



Note.— Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis. Beginning October 1976 (fiscal- year 1977), 
the fiscal year is on an October 1-September 30 basis. The period July 1, 1976 through September 30, 1976 is a separate 
fiscal period known as the transition quarter. 

See "Budget of the United States Government, Fiscal Year 1980" for additional information. 

Sources: Department of the Treasury and Office of Management and Budget 



265 



Table B-71. — Relation of Federal Government receipts and expenditures in the national income 
and product accounts to the unified budget, 1978—80 

[Billions of dollars; fiscal years] 



Receipts and expenditures 



RECEIPTS 



Total budget receipts- 



Government contribution tor employee retirement (grossing). 

Other netting and grossing 

Adjustment to accruals — 

Other - - 



Federal sector, national income and product accounts, receipts. 
EXPENDITURES 



Total budget outlays. 



Lending and financial transactions 

Government contribution for employee retirement (grossing). 

Other netting and grossing 

Defense timing adjustment 

Bonuses on Outer Continental Shelf land leases — 

Other 



Federal sector, national income and product accounts, expenditures... 



1978 



402.0 

7.1 

3.0 

2.8 

-1.0 

413.8 



450.8 

-8.4 
7.1 
3.0 
2.7 
1.2 

-5.8 

450.6 



Estimate 



1979 



456.0 

7.9 

3.5 

-1.9 

-1.1 

464.3 



493.4 

-5.2 
7.9 
3.5 
1.5 
2.2 

-7.0 

496.3 



1980 



502.6 

8.3 

6.3 

-2.0 

-1.3 

513.8 



531.6 

-3.7 
8.3 
6.3 
1.8 
1.1 

-6.2 

539.2 



Note.— See Note, Table B-69. 

See Special Analysis B, "Special Analyses, Budget of the United States Government, Fiscal Year 1980" for description 
of these categories. 

Sources: Department of Commerce (Bureau of Economic Analysis), Department of the Treasury, and Office of Manage- 
ment and Budget. 



266 



Table B-72. — Government receipts and expenditures, national income and product 
accounts, 1929-78 

{Billions of dollars; quarterly data at seasonally adjusted annual rates] 



Calendar year or quarter 



1929. 

1933. 

1939. 

1940. 
1941. 
1942. 
1943. 
1944.. 
1945.. 
1946.. 
1947.. 
1948.. 
1949.. 



1950. 
1951. 
1952. 
1953. 
1954. 
1955. 
1956. 
1957. 
1958. 
1959. 

1960. 
1961. 
1962. 
1963. 
1964. 
1965.. 
1966.. 
1967.. 
1968.. 
1969.. 



1970... 
1971... 
1972... 
1973... 
1974... 
1975... 
1976.. 
1977... 
1978 ». 



1976: I.. 
II.. 
III. 
IV. 



1977:1... 
II... 
lll__ 
IV... 



1978: I... 
II... 
III.. 

IV >_ 



Total government 



Re- 
ceipts 



11.3 

9.3 

15.4 

17.7 
25.0 
32.6 
49.2 
51.2 
53.2 
51.0 
56.9 
58.9 
55.9 

69.0 
85.2 
90.1 
94.6 
89.9 
101.1 
109.7 
116.2 
115.0 
129.4 

139.5 
144.8 
156.7 
168.5 
174.0 
188.3 
212.3 
228.2 
263.4 
296.3 

302.6 
322.2 
367.4 
411.2 
455.1 
468.5 
537.2 
603.3 
682.7 

516.1 
532.8 
543.6 
556.4 

587.4 
598.0 
605.2 
622.3 

638.0 
676.3 
693.3 



Ex- 
pendi- 
tures 



10.3 

10.7 

17.6 

18.4 
28.8 
64.0 
93.3 
103.0 
92.7 
45.6 
42.5 
50.5 
59.3 

61.0 
79.2 
93.9 
101.6 
97.0 
98.0 
104.5 
115.3 
127.6 
131.0 

136.4 
149.1 
160.5 
167.8 
176.3 
187.8 
213.6 
242.4 
268.9 
285.6 

311.9 
340.5 
370.9 
404.9 
458.2 
532.8 
570.4 
621.8 
684.2 

561.1 
562.8 
574.2 
583.5 

595.3 
609.8 
630.5 
651.9 

659.1 
670.1 
692.7 
714.8 



Sur- 
plus or 

deficit 

(-). 

national 

income 

and 

prod- 
uct ac- 
counts 



1.0 

-1.4 
-2.2 

-.7 
-3.8 
-31.4 
-44.1 
-51.8 
-39.5 

5.4 
14.4 

8.4 
-3.4 

8.0 

6.1 

-3.8 

-6.9 

-7.1 

3.1 

5.2 

.9 

-12.6 

-1.6 

3.1 

-4.3 

-3.8 

.7 

-2.3 

.5 

-1.3 

-14.2 

-5.5 

10.7 

-9.4 
-18.3 

-3.5 
6.3 

-3.2 
-64.4 
-33.2 
-18.6 

-1.5 

-44. 9 
-29.9 
-30.6 
-27.1 

-7.8 
-11.8 
-25.2 
-29.6 

-21.1 

6.2 

.6 



Federal Government 



Re- 
ceipts 



3.8 

2.7 

6.7 

8.6 
15.4 
22.9 
39.3 
41.0 
42.5 
39.1 
43.2 
43.2 
38.7 

50.0 
64.3 
67.3 
70.0 
63.7 
72.6 
78.0 
81.9 
78.7 
89.8 

96.1 
98.1 
106.2 
114.4 
114.9 
124.3 
141.8 
150.5 
174.7 
197.0 

192.1 
198.6 
227.5 
258.3 
288.6 
286.2 
331.4 
374.5 
431.6 

318.6 
329.4 
335.5 
342.3 

366.6 
371.4 
374.3 
385.5 

396.2 
424.7 
441.7 



Ex- 
pendi- 
tures 



2.6 

4.0 

8.9 

10.0 
20.5 
56.1 
85.8 
95.5 
84.6 
35.6 
29.8 
34.9 
41.3 

40.8 
57.8 
71.1 
77.1 
69.8 
68.1 
71.9 
79.6 
88.9 
91.0 

93.1 

101.9 
110.4 
114.2 
118.2 
123.8 
143.6 
163.7 
180.6 
188.4 

204.2 
220.6 
244.7 
265.0 
299.3 
356.8 
385.2 
422.6 
461.0 

376.3 
375.8 
387.5 
401.4 

403.9 
411.7 
430.7 
444.1 

448.8 
448.3 
464.5 
482.3 



Sur- 
plus or 
deficit 

(-), 
national 
income 

and 
prod- 
uct ac- 
counts 



1.2 

-1.3 

-2.2 

-1.3 

-5.1 

-33.1 

-46.6 

-54.5 

-42.1 

3.5 

13.4 

8.3 

-2.6 

9.2 

6.5 

-3.7 

-7.1 

-6.0 

4.4 

6.1 

2.3 

-10.3 

-1.1 

3.0 

-3.9 

-4.2 

.3 

-3.3 

.5 

-1.8 

-13.2 

-5.8 

8.5 

-12.1 
-22.0 
-17.3 
-6.7 
-10.7 
-70.6 
-53.8 
-48.1 
-29.4 

-57.7 
-46.4 
-52.0 
-59.1 

-37.3 
-40.3 
-56.4 
-58.6 

-52.6 
-23.6 
-22.8 



State and local 
government 



Re- 
ceipts 



7.6 

7.2 

9.6 

10.0 
10.4 
10.6 
10.9 
11.1 
11.6 
13.0 
15.4 
17.7 
19.5 

21.3 
23.4 
25.4 
27.4 
29.0 
31.7 
35.0 
38.5 
42.0 
46.4 

49.9 
54.0 
58.5 
63.2 
69.5 
75.1 
84.8 
93.6 
107.2 
119.7 

134.9 
152.6 
177.4 
193.5 
210.4 
236.9 
266.9 
296.2 
327.7 

256.4 
262.6 
268.6 
280.2 

283.0 
292.0 
301.8 
307.9 

315.7 
327.4 
329.2 



Ex- 
pendi- 
tures 



7.8 

7.2 

9.6 

9.3 

9.1 

8.8 

8.4 

8.5 

9.0 

11.1 

14.4 

17.6 

20.2 

22.5 
23.9 
25.5 
27.3 
30.2 
32.9 
35.9 
39.8 
44.3 
46.9 

49.8 
54.4 
58.0 
62.8 
68.5 
75.1 
84.3 
94.7 
106.9 
117.6 

132.2 
148.9 
163.7 
180.5 
202.8 
230.6 
246.3 
266.6 
299.8 

243.6 
246.2 
247.2 
248.2 

253.5 
263.5 
270.7 
278.9 

284.2 
297.7 
305.8 
311.6 



Sur- 
plus or 

deficit 

(-), 

national 

income 

and 

prod- 
uct ac- 
counts 



-0.2 
-.1 



.6 
1.3 
1.8 
2.5 
2.7 
2.6 
1.9 
1.0 
.1 
-.7 

-1.2 

-.4 

-.0 

.1 

-1.1 

-1.3 

-.9 

-1.4 

-2.4 

-.4 

.1 
-.4 

.5 

.5 
1.0 
-.0 

.5 
-1.1 

.3 
2.1 

2.8 

3.7 

13.7 

13.0 

7.6 

6.2 

20.7 

29.6 

27.8 

12.8 
16.4 
21.4 
32.0 

29.5 
28.5 
31.2 
29.0 

31.5 
29.8 
23.4 



Note.— Federal grants-in-aid to State and local governments are reflected in Federal expenditures and State and local 
receipts. Total government receipts and expenditures have been adjusted to eliminate this duplication. 

Source: Department of Commerce, Bureau of Economic Analysis. 



267 



Table B^-73. — Federal Government receipts and expenditures, national income and product accounts 

1952-80 
(Billions of dollars; quarterly data at seasonally adjusted annual rates] 





Receipts 




Expenditi 


res 






Sur- 
plus 
or 


















Transfer 






Subsi- 










Indi- 
rect 








payments 






dies 
less 


defi- 






Per- 
sonal 
tax 
and 
non- 
tax 
re- 


















cit 






Corpo- 
rate 
profits 
tax 
ac- 
cruals 


busi- 
ness 


Con- 
tribu- 




Pur- 
chases 






Grants- 
in-aid 


Net 


cur- 
rent 


na- 


Year or quarter 




tax 


tions 




of 






to State 


in- 


sur- 


tion- 




Total 


and 


for 


Total' 


goods 


To 
per- 
sons 


To 


and 


ter- 


plus 


al in- 






non- 


social 




and 


for- 


local 


est 


of 


come 






tax 


insur- 




serv- 


eign- 


govern- 


paid 


gov- 


and 






ceipts 




ac- 
cru- 
als 


ance 




ices 




ers 


ments 




ern- 
ment 
enter- 
prises 


prod- 
uct 
ac- 
counts 


Fiscal year: 




























1952 


65.2 


28.8 


19.4 


9.7 


7.3 


66.0 


47.2 


8.5 


2.6 


2.5 


4.5 


0.8 


-0.8 


1953. 


69.4 


31.4 


19.7 


10.7 


7.6 


75.9 


56.4 


9.2 


2.1 


2.8 


4.5 


.9 


-6.5 


1954 


65.8 


30.3 


17.3 


10.4 


7.8 


74.3 


53.9 


10.5 


1.7 


2.9 


4.6 


.8 


-8.5 


1955 


67.4 


29.7 


18.9 


10.0 


8.7 


67.2 


44.3 


12.1 


2.1 


3.0 


4.6 


1.2 


.2 


1956 


76.3 


33.6 


21.5 


10.8 


10.3 


70.0 


45.5 


12.8 


1.8 


3.2 


4.8 


1.7 


6.3 


1957 


81.0 


36.7 


20.8 


11.7 


11.7 


76.0 


48.1 


14.4 


1.9 


3.7 


5.3 


2.6 


5.0 


1958 


78.1 


36.3 


17.9 


11.6 


12.3 


82.8 


51.1 


17.8 


1.7 


4.7 


5.4 


2.4 


-4.7 


1959 


85.4 


38.2 


21.4 


12.0 


13.9 


91.2 


54.8 


19.9 


1.8 


6.2 


5.6 


2.5 


-5.8 


1960 


94.8 


42.5 


22.3 


13.2 


16.7 


91.3 


52.9 


20.6 


1.8 


6.9 


6.8 


2.4 


3.4 


1961 


95.0 


43.6 


20.0 


13.3 


18.1 


98.1 


55.8 


23.6 


2.1 


6.9 


6.4 


3.3 


-3.1 


1962 


104.0 


47.3 


22.7 


14.2 


19.9 


106.2 


61.0 


25.1 


2.1 


7.6 


6.4 


4.1 


-2.2 


1963 


110.0 


49.6 


23.3 


15.0 


22.1 


111.7 


63.7 


26.5 


2.1 


8.3 


7.1 


4.0 


-1.7 


1964 


115.6 


50.7 


25.7 


15.6 


23.6 


117.2 


65.9 


27.4 


2.2 


9.8 


7.7 


4.1 


-1.5 


1965 


120.0 


51.4 


27.1 


16.9 


24.5 


118.5 


64.6 


28.4 


2.2 


10.9 


8.2 


4.3 


1.4 


1966 


132.7 


57.5 


30.8 


15.5 


28.9 


132.7 


72.4 


31.8 


2.3 


12.7 


8.7 


4.8 


.0 


1967 


146.0 


64.4 


30.3 


15.8 


35.5 


154.9 


86.0 


37.2 


2.2 


14.8 


9.6 


5.2 


-8.9 


1968 


160.0 


71.4 


33.2 


17.1 


38.4 


172.2 


95.0 


42.7 


2.1 


17.8 


10.5 


4.1 


-12.2 


1969 


190.1 


90.0 


37.0 


18.6 


44.5 


184.7 


98.0 


48.7 


2.2 


19.2 


12.1 


4.6 


5:4 


1970 


194.9 


93.6 


33.0 


19.2 


49.2 


195.6 


97.0 


55.0 


2.0 


22.6 


13.6 


5.4 


-.6 


1971 


192.5 


87.5 


32.0 


20.0 


52.9 


212.7 


94.8 


67.7 


2.3 


26.8 


14.2 


6.8 


-20.2 


1972 


213.5 


100.3 


34.2 


19.9 


59.1 


232.9 


100.9 


76.1 


2.8 


32.6 


14.1 


6.4 


-19.5 


1973 


240.5 


107.3 


41.0 


20.7 


71.5 


256.2 


101.7 


87.1 


2.7 


40.4 


15.9 


9.1 


-15.7 


1974 


271.8 


122.6 


43.7 


21.4 


84.2 


278.8 


104.6 


101.7 


3.0 


41.6 


19.8 


8.0 


-7.0 


1975 


283.5 


127.1 


42.1 


22.2 


92.1 


328.7 


118.0 


131.2 


3.1 


48.4 


21.9 


5.7 


-45.3 


1976 


313.9 


136.9 


51.9 


24.2 


100.9 


371.5 


126.2 


153.5 


3.0 


57.5 


25.2 


6.2 


-57.6 


1977 


365.3 


165.9 


58.8 


24.5 


116.1 


412.0 


140.7 


166.4 


3.2 


66.2 


28.4 


7.0 


-46.7 


1978 


413.8 


186.3 


67.2 


27.2 


133.1 


450.6 


151.1 


178.4 


3.4 


74.6 


33.7 


9.4 


-36.8 


19792 


464.3 


206.6 


76.9 


29.0 


151.8 


496.3 


166.0 


196.6 


3.6 


78.2 


41.6 


10.3 


-32.0 


19802 


513.8 


236.4 


78.2 


30.4 


168.8 


539.2 


178.2 


222.5 


3.9 


78.9 


45.2 


10.5 


-25.4 


Calendar year: 




























1952 


67.3 


31.0 


18.6 


10.3 


7.4 


71.1 


52.4 


8.8 


2.1 


2.6 


4.5 


.8 


-3.7 


1953 


70.0 


32.2 


19.5 


10.9 


7.4 


77.1 


57.5 


9.4 


2.0 


2.8 


4.6 


.7 


-7.1 


1954 


63.7 


29.0 


16.9 


9.7 


8.2 


69.8 


47.9 


11.5 


1.8 


2.9 


4.6 


1.0 


-6.0 


1955 


72.6 


31.4 


21.1 


10.7 


9.4 


68.1 


44.5 


12.4 


2.0 


3.1 


4.6 


1.5 


4.4 


1956 


78.0 


35.2 


20.9 


11.2 


10.6 


71.9 


45.9 


13.4 


1.9 


3.3 


5.1 


2.4 


6.1 


1957 


81.9 


37.4 


20.4 


11.8 


12.3 


79.6 


50.0 


15.7 


1.8 


4.2 


5.5 


2.4 


2.3 


1958 


78.7 


36.8 


18.0 


11.5 


12.4 


88.9 


53.9 


19.6 


1.8 


5.6 


5.2 


2.8 


-10.3 


1959 


89.8 


39.9 


22.5 


12.5 


14.9 


91.0 


53.9 


20.1 


1.8 


6.8 


6.2 


2.1 


-1.1 


1960 


96.1 


43.6 


21.4 


13.4 


17.6 


93.1 


53.7 


21.6 


1.9 


6.5 


6.8 


2.6 


3.0 


1961 


98.1 


44.7 


21.5 


13.6 


18.3 


101.9 


57.4 


25.0 


2.1 


7.2 


6.2 


4.0 


-3.9 


1962 


106.2 


48.6 


22.5 


14.6 


20.5 


110.4 


63.7 


25.6 


2.2 


8.0 


6.8 


4.2 


-4.2 


1963 


114.4 


51.5 


24.6 


15.3 


23.1 


114.2 


64.6 


27.0 


2.2 


9.1 


7.3 


3.9 


.3 


1964 


114.9 


48.6 


26.1 


16.2 


24.0 


118.2 


65.2 


27.9 


2.2 


10.4 


8.0 


4.5 


-3.3 


1965 


124.3 


53.9 


28.9 


16.5 


25.0 


123.8 


67.3 


30.3 


2.2 


11.1 


8.4 


4.6 


.5 


1966 


141.8 


61.7 


31.4 


15.6 


33.1 


143.6 


78.8 


33.5 


2.3 


14.4 


9.2 


5.5 


-1.8 


1967 


150.5 


67.5 


30.0 


16.3 


36.7 


163.7 


90.9 


40.1 


2.2 


15.9 


9.8 


4.7 


-13.2 


1968 


174.7 


79.6 


36.3 


18.0 


40.8 


180.6 


98.0 


46.0 


2.1 


18.6 


11.4 


4.5 


-5.8 


1969 


197.0 


94.8 


36.2 


19.0 


47.0 


188.4 


97.5 


50.6 


2.1 


20.3 


12.9 


5.2 


8.5 


1970 


192.1 


92.2 


30.8 


19.3 


49.7 


204.2 


95.6 


61.3 


2.2 


24.4 


14.3 


6.3 


-12.1 


1971 


198.6 


89.9 


33.5 


20.4 


54.9 


220.6 


96.2 


72.7 


2.6 


29.0 


14.0 


6.2 


-22.0 


1972 


227.5 


108.2 


36.6 


20.0 


62.8 


244.7 


102.1 


80.5 


2.7 


37.5 


14.6 


7.8 


-17.3 


1973 


258.3 


114.6 


43.0 


21.2 


79.4 


265.0 


102.2 


93.2 


2.6 


40.6 


18.2 


8.2 


-6.7 


1974 


288.6 


131.1 


45.9 


21.7 


89.9 


299.3 


111.1 


114.4 


3.2 


43.9 


20.9 


5.3 


-10.7 


1975 


286.2 


125.4 


42.8 


23.9 


94.2 


356.8 


123.1 


146.0 


3.1 


54.6 


23.2 


6.8 


-70.6 


1976 


331.4 


146.8 


54.8 


23.4 


106.4 


385.2 


129.9 


158.4 


3.2 


61.1 


26.8 


5.8 


-53.8 


1977 


374.5 


169.4 


61.3 


25.0 


118.7 


422.6 


145.1 


169.5 


3.2 


67.4 


29.1 


8.3 


-48.1 


1978 p 


431.6 


193.2 


71.7 


27.9 


138.7 


461.0 


154.0 


181.8 


3.5 


76.6 


35.5 


9.6 


-29.4 


1977: 1 


366.6 


168.3 


58.4 


24.4 


115.5 


403.9 


138.3 


165.6 


3.0 


62.1 


28.1 


6.7 


-37.3 


II 


371.4 


167.0 


61.8 


24.8 


117.7 


411.7 


142.9 


165.2 


3.0 


65.4 


28.8 


6.4 


-40.3 


Ill 


374.3 


167.6 


62.0 


25.4 


119.3 


430.7 


146.8 


172.0 


3.7 


70.9 


28.9 


8.4 


-56.4 


IV 


385.5 


174.8 


62.9 


25.6 


122.2 


444.1 


152.2 


175.0 


3.4 


71.1 


30.7 


11.8 


-58.6 


1978: 1 


396.2 


176.8 


59.6 


26.5 


133.3 


448.8 


151.5 


176.9 


3.3 


73.9 


33.2 


10.0 


-52.6 


II 


424.7 


186.7 


72.6 


27.9 


137.6 


448.3 


147.2 


177.0 


3.7 


75.9 


34.6 


10.0 


-23.6 


Ill 


441.7 


199.7 


73.6 


28.2 


140.1 


464.5 


154.0 


185.5 


3.4 


77.5 


36.3 


8.0 


-22.8 


IV p 





209.7 





29.0 


144.0 


482.3 


163.4 


187.8 


3.6 


79.1 


37.9 


10.5 





' Includes an item for the difference between wage accruals and disbursements, not shown separately. 

3 Estimates. 

Sources: Department of Commerce (Bureau of Economic Analysis) and Office of Management and Budget 

268 



Table B-74. — State and local government receipts and expenditures, national income and product 

accounts, 1946-78 

[Billions of dollars; quarterly data at seasonally adjusted annual rates] 





Receipts 


Expenditures 


Surplus 


Calendar 
year or 
quarter 


Total 


Per- 
sonal 

tax 

and 
nontax . 
eceipts ' 


Cor- 
porate 
profits 

tax 
ccruals 


ndirect 
busi- 
ness 
tax 
and 
nontax 
i ccruals 


Contri- 
butions 
for 
social 
insur- 
ance 


Fed- 
eral 
grants- 
in-aid 


Total i 


Pur- 
chases 

of 
goods 
and 
serv- 
ices 


Trans- 
fer 
pay- 
ments 
to 

per- 
sons 


Net 

nterest 

paid 


Sub- 
sidies 
less 
current 
surplus 
of gov- 
ern- 
ment 
enter- 
prises 


or 
deficit 

national 
income 
and 
prod- 
uct ac- 
counts 


1946 


13.0 
15.4 
17.7 
19.5 

21.3 

23.4 
25.4 
27.4 
29.0 

31.7 

35.0 
38.5 
42.0 
46.4 

49.9 
54.0 
58.5 
63.2 
69.5 

75.1 

84.8 
93.6 
107.2 
119.7 

134.9 
152.6 
177.4 
193.5 
210.4 

236.9 
266.9 
296.2 
327.7 

256.4 
262.6 
268.6 
280.2 

283.0 
292.0 
301.8 
307.9 

315.7 
327.4 
329.2 


1.5 
1.7 
2.1 
2.4 

2.5 
2.8 
3.0 
3.2 
3.5 

3.9 
4.5 
5.0 
5.4 
6.1 

6.7 
7.4 
8.2 
8.8 
10.0 

10.9 
12.8 
14.6 
17.4 
20.6 

23.1 
26.4 
33.0 
36.1 
39.2 

43.4 
49.7 
56.6 
62.9 

46.7 
48.7 
50.3 
52.9 

54.5 
56.2 
57.0 
58.5 

60.5 
62.5 
63.5 
65.3 


0.5 
.6 
.7 
.6 

.8 
.9 
.8 
.8 
.8 

1.0 
1.0 
1.0 
1.0 
1.2 

1.2 
1.3 
1.5 
1.7 
1.8 

2.0 
2.2 
2.5 
3.1 
3.4 

3.7 
4.2 
5.0 
5.7 
6.5 

7.1 
9.4 
10.5 
12.3 

9.1 
9.6 
9.5 
9.3 

9.9 
10.6 
10.7 
10.9 

10.4 
12.4 
12.5 


9.3 

10.7 
12.2 
13.3 

14.6 
15.9 
17.4 
18.8 
19.9 

21.6 
23.8 
25.7 
27.2 
29.3 

32.0 
34.4 
37.0 
39.4 
42.6 

46.1 
49.7 
54.0 
60.8 
67.4 

74.7 
83.1 
91.0 
99.0 
106.9 

115.4 
128.0 
140.0 
150.3 

123.7 
126.6 
129.2 
132.4 

135.9 
138.5 
141.2 
144.6 

146.8 
151.5 
149.5 
153.3 


0.6 
.7 
.8 

.9 

1.1 
1.4 
1.6 
1.7 
2.0 

2.1 
2.3 
2.6 
2.8 
3.1 

3.4 
3.7 
3.9 
4.2 
4.7 

5.0 
5.7 
6.7 
7.2 
7.9 

9.0 
9.9 
10.8 
12.1 
13.9 

16.4 
18.7 
21.7 
25.5 

18.0 
18.5 
19.0 
19.5 

20.5 
21.4 
22.0 
22.8 

24.1 
25.2 
26.1 
26.7 


1.1 
1.7 
2.0 
2.2 

2.3 
2.5 
2.6 
2.8 
2.9 

3.1 
3.3 
4.2 
5.6 
6.8 

6.5 
7.2 
8.0 
9.1 
10.4 

11.1 

14.4 
15.9 
18.6 
20.3 

24.4 
29.0 
37.5 
40.6 
43.9 

54.6 
61.1 
67.4 
76.6 

58.8 
59.2 
60.5 
66.1 

62.1 

65.4 
70.9 
71.1 

73.9 
75.9 
77.5 
79.1 


11.1 

14.4 
17.6 
20.2 

22.5 
23.9 
25.5 
27.3 
30.2 

32.9 
35.9 
39.8 
44.3 
46.9 

49.8 
54.4 
58.0 
62.8 
68.5 

75.1 

84.3 
94.7 
106.9 
117.6 

132.2 
148.9 
163.7 
180.5 
202.8 

230.6 
246.3 
266.6 
299.8 

243.6 
246.2 
247.2 
248.2 

253.5 
263.5 
270.7 
278.9 

284.2 
297.7 
305.8 
311.6 


9.9 
12.8 
15.3 
18.0 

19.8 
21.8 
23.2 
25.0 
27.8 

30.6 
33.5 
37.1 
41.1 
43.7 

46.5 
50.8 
54.3 
59.0 
64.6 

71.1 

79.8 
89.3 
100.7 
110.4 

123.2 
137.5 
151.0 
167.3 
191.5 

215.4 
229.6 
248.9 
280.2 

226.9 
229.4 
230.5 
231.7 

236.7 
245.9 
252.7 
260.3 

265.2 
277.6 
285.8 
292.2 


1.7 
2.3 
3.0 
3.0 

3.6 
3.1 
3.3 
3.5 
3.6 

3.8 
3.9 
4.3 
4.8 
5.1 

5.4 
5.8 
6.0 
6.4 
6.9 

7.3 
8.1 
9.4 
10.6 
12.1 

14.6 

17.2 
18.9 
20.3 
20.5 

24.5 
27.2 
29.7 
33.5 

26.4 
26.9 
27.5 
28.0 

28.6 
29.3 
30.1 
30.9 

32.0 
33.1 
34.1 
34.6 


0.2 
.1 
.1 
.1 

.1 
.0 
.0 
.0 

.1 

.1 
.1 
.1 
.1 
.1 

.1 
.1 
.1 
.1 
-.1 

-.3 

-.7 

-.9 

-1.2 

-1.6 

-2.0 
-1.8 
-2.1 
-2.9 

-4.9 

-4.8 
-5.4 
-6.5 
-7.9 

-4.9 
-5.2 
-5.7 
-5.9 

-6.2 
-6.4 
-6.5 
-6.8 

-7.1 
-7.3 
-8.2 
-9.1 


-0.7 
-.8 
-.8 
-.9 

-.9 
-1.0 
-1.1 
-1.2 
-1.3 

-1.5 
-1.6 
-1.7 
-1.7 
-2.0 

-2.2 
-2.3 
-2.5 
-2.8 
-2.8 

-3.0 
-3.0 
-3.1 
-3.2 
-3.3 

-3.6 
-3.8 
-4.2 
-4.4 
-4.3 

-4.5 
-5.1 
-5.6 
-5.9 

-4.9 
-4.9 
-5.1 
-5.5 

-5.7 
-5.3 
-5.7 
-5.5 

-6.0 
-5.7 
-5.9 
-6.1 


1 9 


1947 


1 


1948 


.1 


1949 


.7 


1950 


1.2 


1951 


4 


1952 


—.0 


1953 


1 


1954 


—1.1 


1955 


—1.3 


1956 


9 


1957.-. 


1 4 


1958 

1959 

1960 


-2.4 
-.4 

1 


1961 


_ 4 


1962 


5 


1963 


.5 


1964 


1 


1965 


- 


1966 


.5 


1967 


-1.1 


1968 


.3 


1969 


2.1 


1970 


2.8 


1971 


3.7 


1972 


13.7 


1973 


13.0 


1974... 


7.6 


1975 


6.2 


1976 


20.7 


1977 


29.6 


1978" 


27.8 


1976: 1 

II 

Ill 

IV 

1977: 1 

II 

Ill 
IV 

1978: 1 

II 

Ill 

IV * 


12.8 
16.4 
21.4 
32.0 

29.5 
28.5 
31.2 
29.0 

31.5 
29.8 
23.4 



1 Includes an item for the difference between wage accruals and disbursements, not shown separately. 
Source: Department of Commerce, Bureau of Economic Analysis. 



269 



Table B-75. — State and local government revenues and expenditures, selected fiscal years, 1927-77 

[Millions of dollars] 



Fiscal year ' 



1927 

1932 

1934 

1936 

1938 

1940 

1942 

1944 

1946 

1948 

1950 

1952 

1953 

1954 

1955 

1956 

1957 

1958 

1959 

1960 

1961 

1962 

1963 

1962-63 •. 
1963-64 » 
1964-65 « 

1965-66 « 
1966-67 « 
1967-68 « 
1968-69 « 
1969-70' 

1970-71 « 
1971-72 » 
1972-73 » 
1973-74 » 

1974-75 « 

1975-76 « 
1976-77 5 



General revenues by source - 



Total 



7,271 

7,267 
7,678 
8,395 
9,228 

9,609 
10,418 
10,908 
12,356 
17, 250 

20,911 
25, 181 
27, 307 
29,012 

31,073 
34, 667 
38, 164 
41,219 
45, 306 

50, 505 
54, 037 
58, 252 
62, 890 

62, 269 
68, 443 
74, 000 

83, 036 
91,197 
101,264 
114,550 
130,756 

144,927 
166,352 
190, 214 
207, 670 
228, 171 

256, 176 
285, 796 



Prop- 
erty 
taxes 



4,730 

4,487 
4,076 
4,093 
4,440 

4,430 
4,537 
4,604 
4,986 
6,126 

7,349 
8,652 
9,375 
9,967 

10,735 
11,749 
12,864 
14, 047 
14,983 

16,405 
18,002 
19, 054 
20, 089 

19, 833 
21,241 
22, 583 

24,670 
26, 047 
27, 747 
30, 673 
34, 054 

37,852 
42,133 
45, 283 
47, 705 
51,491 

57, 001 
62, 535 



Sales 
and 
gross 
re- 
ceipts 
taxes 



470 

752 
1,008 
1,484 
1,794 

1,982 
2,351 
2,289 
2,986 
4,442 

5,154 
6,357 
6,927 
7,276 

7,643 
8,691 
9,467 
9,829 
10,437 

11,849 
12,463 
13,494 
14,456 

14,446 
15,762 
17,118 

19, 085 
20, 530 
22,911 
26,519 
30, 322 

33, 233 
37,488 
42, 047 
46, 098 
49,815 

54, 547 
60, 595 



Indi- 
vidual 
income 

taxes 



74 
80 
153 
218 

224 
276 
342 
422 
543 

788 

998 

1,065 

1,127 

1,237 
1,538 
1,754 
1,759 
1,994 

2,463 
2,613 
3,037 
3,269 

3,267 
3,791 
4,090 

4,760 
5,826 
7,308 
8,908 
10,812 

11,900 
15,237 
17, 994 
19, 491 
21,454 

24, 575 
29, 245 



Corpo- 
ration 
net 

income 
taxes 



92 

79 
49 
113 
165 

156 
272 
451 
447 
592 

593 
846 
817 
778 

744 

890 

984 

1,018 

1,001 

1,180 
1,266 
1,308 
1,505 

1,505 
1,695 
1,929 

2,038 
2,227 
2,518 
3,180 
3,738 

3,424 
4,416 
5,425 
6,015 
6,642 

7,273 
9,174 



Reve- 
nue 
from 
Federal 
Govern- 
ment 



116 

232 

1,016 
948 
800 

945 
858 
954 
855 
1,861 

2,486 
2,566 
2,870 
2,966 

3,131 
3,335 
3,843 
4,865 
6,377 

6,974 
7,131 
7,871 
8,722 

8,663 
10, 002 
11,029 

13,214 
15,370 
17,181 
19, 153 
21,857 

26, 146 
31,253 
39, 256 
41, 820 
47, 034 

55, 589 
62, 575 



All 

other' 



1,793 

1,643 
1,449 
1,604 
1,811 

1,872 
2,123 
2,269 
2,661 
3,685 

4,541 
5,763 
6,252 
6,897 

7,584 
8,465 
9,250 
9,699 
10,516 

11,634 
12, 563 
13,489 
14,850 

14, 556 
15,951 
17,250 

19,269 
21,197 
23, 598 
26,118 
29, 971 

32, 374 
35,826 
40,210 
46, 541 
51,735 

57, 191 
61, 673 



General expenditures by function ■ 



Total 



7,210 

7,765 
7,181 
7,644 
8,757 

9,229 
9,190 
8,863 
11,028 
17,684 

22, 787 
26, 098 
27,910 
30, 701 

33, 724 
36,711 
40, 375 
44, 851 
48, 887 

51,876 
56, 201 
60, 206 
64, 816 

63,977 
69, 302 
74, 546 

82, 843 
93, 350 
102,411 
116,728 
131,332 

150,674 
166,873 
181,227 
198, 959 
230, 721 

256, 731 
274, 388 



Edu- 
cation 



2,235 

2,311 
1,831 
2,177 
2,491 

2,638 
2,586 
2,793 
3,356 
5,379 

7,177 
8,318 
9,390 
10, 557 

11,907 
13,220 
14,134 
15,919 
17, 283 

18,719 
20, 574 
22, 216 
23, 776 

23, 729 
26, 286 
28, 563 

33, 287 
37,919 
41,158 
47, 238 
52,718 

59,413 
64,886 
69,714 
75, 833 
87, 858 

97,216 
102, 805 



High- 
ways 



1,809 

1,741 
1,509 
1,425 
1,650 

1,573 
1,490 
1,200 
1,672 
3,036 

3,803 
4,650 
4,987 
5,527 

6,452 
6,953 
7,816 
8,567 
9,592 

9,428 
9,844 
10,357 
11,136 

11,150 
11,664 
12,221 

12,770 
13,932 
14,481 
15,417 
16,427 

18, 095 
19,010 
18,615 
19, 946 
22, 528 

23, 907 
23, 105 



Public 
wel- 
fare 



151 

444 

889 

827 

1,069 

1,156 
1,225 
1,133 
1,409 
2,099 

2,940 
2,788 
2,914 
3,060 

3,168 
3,139 
3,485 
3,818 
4,136 

4,404 
4,720 
5,084 
5,481 

5,420 
5,766 
6,315 

6,757 
8,218 
9,857 
12,110 
14,679 

18, 226 
21,070 
23, 582 
25,085 
28, 155 

32, 604 
35,941 



All 
other « 



3,015 

3,269 
2,952 
3,215 
3,547 

3,862 
3,889 
3,737 
4,591 
7,170 

8,867 
10, 342 
10,619 
11,557 

12, 197 
13,399 
14,940 
16,547 
17,876 

19,325 
21,063 
22, 549 
24, 423 

23,678 
25, 586 
27, 447 

30, 029 
33, 281 
36,915 
41,963 
47, 508 

54,940 
61,907 
69, 316 
78, 096 
92, 180 

103, 004 
112, 537 



1 Fiscal years not the same for all governments. See footnote 5. 

3 Excludes revenues or expenditures of publicly owned utilities and liquor stores, and of insurance-trust activities. 
Intergovernmental receipts and payments between State and local governments are also excluded. 

3 Includes licenses and other taxes and charges and miscellaneous revenues. 

* Includes expenditures for health, hospitals, police, local fire protection, natural resources, sanitation, housing and 
urban renewal, local parks and recreation, general control, financial administration, interest on general debt, and un- 
allocable expenditures. 

5 Data for fiscal year ending in the 12-month period through June 30. Data for 1963 and earlier years include local govern- 
ment amounts grouped in terms of fiscal years ended during the particular calendar year. 

Note.— Data are not available for intervening years. 

Source: Department of Commerce, Bureau of the Census. 



270 



Table B-7<5. — Interest-bearing public debt securities by kind of obligation, 1967-78 

[Millions of dollars] 



End of year 
or month 



fiscal year 
1967.. 
1968.. 
1969.. 

1970.. 
1971.. 
1972.. 
1973.. 
1974.. 

1975.. 
1976.. 
1977.. 
1978.. 

1977: Jan. 
Feb. 
Mar. 
Apr. 
May. 
June 

July. 
Aug. 
Sept 
Oct. 
Nov. 
Dec. 

1978: Jan. 
Feb. 
Mar. 
Apr. 
May. 
June 

July. 
Aug. 
Sept 
Oct.. 
Nov. 
Dec. 



Total 

in- 

terest- 

bearing 

public 

debt 

securities 



322, 286 
344, 401 
351,729 

369, 026 
396, 289 
425, 360 
456, 353 
473,238 

532, 122 
619, 254 
697, 629 
766, 971 

652, 980 
662, 320 
668, 216 
668, 509 

670, 958 
673, 389 

671, 386 
684, 081 
697, 629 
696, 301 
706, 973 
715,227 

720, 563 
728, 474 
736, 929 
733, 074 
740, 579 
748, 002 

749, 462 
763, 404 
766,971 
775, 452 
782, 048 
782, 371* 



Marketable 



Total 



«210,672 
226, 592 
226, 107 

232, 599 
245,473 
257, 202 
262,971 



Bills 



Treasury 
notes 



58, 535 
64, 440 
68, 356 

76, 154 
86,677 
94, 648 
100, 061 



266,575 105,019 



315,606 
392, 581 
443, 508 
485, 155 



423,995 164,005 
431,607 164,175 



435, 379 
434, 065 
431,447 
431, 149 

430, 248 
438, 146 
443, 508 
447, 435 
454, 862 
459, 927 

466, 780 
470, 766 
478, 252 
472, 193 
473, 684 
477, 699 

481,041 
485, 557 
485, 155 
491,651 
493, 337 
487, 546 



128, 569 
161, 198 
156, 091 
160, 936 



164, 264 
161,977 
157,931 

155, C64 

154, 227 
154, 283 

156, 091 
156,174 
156, 656 
161,081 

161,221 
161,817 

165, 652 
159, 640 
159, 391 

159, 757 

160, 092 
160,615 
160, 936 
161,227 
161,548 
161,747 



49, 108 
71,073 
78,946 

93, 489 
104, 807 
113,419 
117,840 
128,419 

150, 257 
191,758 
241,692 

267, 865 

219, 474 
225, 856 

229, 625 
230, 655 

230, 230 
232, 885 

231,371 
238, 084 
241,692 
245, 587 
251, 104 
251, 800 

257, 077 

258, 472 
262, 179 
262, 180 
261,612 
265, 310 

266, 586 

268, 531 

267, 865 
272,610 
271, 663 
265, 791 



Treasury 
bonds > 



97,418 
91,079 
78, 805 



Total 



111,614 
117,808 
125, 623 



62,956 136,426 
53,989 150,816 



49, 135 
45,071 
33, 137 

36, 779 

39, 626 
45, 724 
56, 355 

40, 516 
41,576 
41,490 
41,433 
43, 286 
43, 200 

44,650 
45, 778 
45, 724 
45, 674 
47, 102 

47, 045 

48, 483 
50, 477 
50, 420 
50, 373 
52, 681 
52, 632 

54, 363 
56, 410 
56, 355 
57,814 
60, 125 
60, 007 



168,158 
193, 382 
206, 663 

216,516 
226, 673 
254, 121 
281,816 

228, 985 
230,714 
232, 837 
234, 444 
239,511 
242, 240 

241,138 
245, 935 
254,121 
248, 866 
252,111 
255, 300 

253, 783 

257, 707 

258, 677 
260, 881 
266, 895 
270, 303 

268, 420 
277, 847 
281,816 
283, 801 
288,711 
294, 825 



Nonmarketable 



U.S. 
savings 
bonds 



51,213 
51,712 
51,711 

51,281 
53, 003 
55,921 
59,418 
61,921 

65, 482 
69,733 
75,411 
79, 798 

72, 234 

72, 640 

73, 037 
73, 457 

73, 908 

74, 282 

74, 803 

75, 059 
75,411 
75,816 

76, 224 
76, 602 

76, 987 
77,415 

77, 804 

78, 220 
78, 645 

78, 965 

79, 281 
79, 543 

79, 7S8 
30, 091 

80, 331 
80, 546 



Foreign 
govern- 
ment 
series » 



Govern- 
ment 
account 
series » 



1,514 
3,741 
4,070 

4,755 
9,270 
18, 985 
28, 524 
25,011 

23,216 

21, 500 
21,799 
21,680 

22, 209 
22, 069 
22, 078 
21,903 
21,831 
21,732 



56, 155 
59, 526 
66, 790 

76, 323 
82, 784 
89, 598 
101,738 
115,442 

124, 173 
130,557 
140,113 
153,271 

126,810 
127,770 
128, 192 
128,992 

133, 029 

134, 754 



21,545 132,447 

21,370 136,329 

21,799 140,113 

21,123 136,890 

21,665 138,580 

22,187 139,774 

22,787 ,136,364 

22,597 139,422 



23, 649 
23, 433 
22,419 
21,460 



137, 956 

138, 833 
144, 394 
146, 448 



20,813 1 144, 665 
22,224 149,047 
21,680 153,271 
24,042 152,685 
26,624 1154,812 
29,593 157,522 



Other * 



2,731 
2,828 
3,051 

4,068 
5,759 
3,654 
3,701 
4,289 

3,644 
4,883 

16, 797 
27, 067 

7,731 
8,235 
9,529 
10,092 
10, 743 
11,473 

12, 342 
13,176 
16, 797 
15, 039 

15, 642 

16, 737 

17, 644 

18, 273 

19, 267 

20, 395 
21,436 
23, 430 

23,660 
27,032 
27, 067 
26, 983 
26, 944 
27, 164 



1 Includes Treasury bonds and minor amounts of Panama Canal and postal savings bonds. 

1 Nonmarketable certificates of indebtedness, notes, bonds, and bills in the Treasury foreign series and foreign-currency- 
series issues. 

* Includes Treasury deposit funds and some special issues formerly included in "Other." 

> Includes depository bonds, retirement plan bonds, Rural Electrification Administration bonds, State and local bonds, 
and special issues held only by U.S. Government agencies and trust funds and the Federal home loan banks. 

' Includes $5,610 million in certificates not shown separately. 

Note.— Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis; beginning October 1976 (fiscal year 1977)' 
the fiscal year is on an October 1 -September 30 basis. 

Source: Department of the Treasury. 



271 



Table E-77. — Estimated ownership of public debt securities, 1967-78 
[Par values; 1 billions of dollars] 





Total public debt securities 




Total 2 


Held 
by 

Govern- 
ment 
accounts 


Held by 
Federal 
Reserve 
Banks 






Held by private investors 






End of year or 
month 


Totals 


Com- 
mercial 
banks « 


Mutual 
savings 

banks 
and in- 
surance 

com- 
panies 


Corpo- 
rations 5 


State 
and loca 
govern- 
ments • 


Indi- 
viduals ' 


Miscel- 
laneous 
inves- 
tors «•« 


Fiscal year: 
1967 


322.9 
345.4 
352.9 

370.1 
397.3 
426.4 
457.3 
474.2 

533.2 
620.4 
698.8 
771.5 

653.9 
663.3 
669.2 
671.0 
672.1 
674.4 

673.9 
685.2 
698.8 
697.4 
708.0 
718.9 

721.6 
729.8 
738.0 
736.6 
741.6 
749.0 

750.5 
764.4 
771.5 
776.4 
783.0 
789.2 


71.8 

76.1 
84.8 

95.2 

102.9 
111.5 
123.4 
138.2 

145.3 
149.6 
155.5 
168.0 

144.1 
144.4 
144.9 
145.5 
149.4 
151.2 

148.7 
151.9 
155.5 
152.2 
153.9 
154.8 

151.5 
154.2 
152.7 
153.6 
159.1 
161.1 

159.3 
163.7 
168.0 
166.3 
.167.4 
170.0 


46.7 
52.2 
54.1 

57.7 
65.5 
71.4 
75.0 
80.5 

84.7 

94.4 
104.7 
115.3 

94.1 
95.8 
96.0 
99.8 
97.4 
102.2 

98.6 
98.4 

104.7 
94.6 
96.5 

102.8 

97.0 
98.5 
101.6 
103.5 
102.8 
110.1 

108.9 
111.7 
115.3 
115.3 
113.3 
110.6 


204.4 
217.0 
214.0 

217.2 
228.9 
243.6 
258.9 
255.6 

303.2 
376.4 
438.6 
488.3 

415.7 
423.1 
428.3 
425.7 
425.3 
421.0 

426.5 
434.9 
438.6 
450.6 
457.6 
461.3 

473.1 
477.1 
483.7 
479.5 
479.7 
477.8 

482.3 
489.0 
488.3 
494.7 
502.3 
508.6 


55.5 
59.7 
55.3 

52.6 
61.0 
60.9 
58.8 
53.2 

69.0 
92.5 
99.8 
95.3 

102.4 
104.4 
104.9 
104.1 
102.6 
102.8 

100.7 
100.4 
99.8 
99.7 
100.6 
101.4 

100.9 
102.2 
101.1 
100.7 
98.4 
98.5 

97.7 
95.8 
95.3 
94.3 
93.5 


13.2 

12.5 
11.6 

10.4 
10.3 
10.2 
9.6 
8.5 

10.6 

16.0 
20.5 
20.5 

18.6 
18.8 
18.9 
18.9 
19.0 
19.0 

19.4 
20.2 
20.5 
20.6 
20.9 
21.0 

20.9 
20.8 
20.6 
20.4 
20.5 
20.2 

20.6 
20.6 
20.5 
20.7 
20.4 


11.0 
12.0 
11.1 

8.5 
7.4 
9.3 
9.8 
10.8 

13.2 
24.3 
23.3 
21.5 

29.7 
31.0 
29.2 
29.2 
27.6 
24.3 

23.5 
25.0 
23.3 
23.2 
22.8 
22.7 

23.4 
22.3 
20.8 
19.9 
19.7 
19.0 

20.0 
22.4 
21.5 
21.0 
20.9 


23.6 
25.1 
26.4 

29.0 
25.9 
26.9 
28.8 
28.3 

31.7 
39.3 
53.0 
67.8 

44.8 
43.3 
44.4 
48.4 
49.1 
47.6 

47.9 
52.1 
53.0 
54.0 
55.3 
55.2 

56.7 
58.6 
61.2 
61.2 
60.2 
62.7 

61.7 
69.2 
67.8 
67.1 
69.1 


70.4 
74.2 
77.3 

81.8 
75.4 
73.2 
75.9 
80.7 

87.1 

96.4 
103.9 
109.3 

101.0 
101.5 
101.9 
102.2 
102.7 
103.0 

103.4 
103.7 
103.9 
104.4 
104.9 
105.3 

106.1 
106.6 
106.9 
107.1 
107.7 
108.1 

108.5 
108.9 
109.3 
109.8 
110.2 


30 7 


1968 . 


33 4 


1969 


32 3 


1970 


35 


1971 


49 1 


1972 


63.2 


1973 


76.0 


1974 


74.2 


1975 


91.5 


1976 

1977 

1978 - 


107.9 
138.1 
173.9 


1977: Jan 

Feb 

Mar 

Apr 

May 


119.2 
124.1 
129.0 
122.9 
124.3 


June 


124.3 


July 


131.6 


Aug 


133.5 


Sept 


138.1 


Oct 


148.7 


Nov 


153.1 


Dec 


155.7 


1978: Jan 


165.1 


Feb 


166.6 


Mar 


173.1 


Apr . 


170.2 




173.2 


June 


169.3 


July 


173.9 


Aug 


172.1 


Sept 


173.9 


Oct 

Nov 


181.8 
188. 2 


Dec 










1 









1 U.S. savings bonds, series A-F and J. and U.S. savings notes are included at current redemption value. 

: As of July 31, 1974. public debt outstanding has been adjusted to exclude the notes of the International Monetary 
Fund to conform with the Budget presentation. This adjustment applies to the 1967-78 data in this table. 

' For comparability with 1975-78 published data, published data for 1967-74 have been adjusted to exclude notes of 
the International Monetary Fund. These adjustments amounted to $3.3 billion in 1967, $2.2 billion in 1968, and $0.8 billion 
in each year 1969 through 1974. These adjustments were necessary in order to add to the total public debt figures as 
published by the Department of the Treasury. 

* Includes commercial banks, trust companies, and stock savings banks in the United States and Territories and island 
possessions; figures exclude securities held in trust departments. Since the estimates in this table are on the basis of par 
values and include holdings of banks in United States Territories and possessions, they do not agree with the estimates 
in Table B -60, which are based on book values and relate only to banks within the United States. 

1 Exclusive of banks and insurance companies. 

" Includes trust, sinking, and investment funds of State and local governments and their agencies, and of Territories 
and possessions. 

■ Includes partnerships and personal trust accounts. 

1 Includes savings and loan associations, nonprofit institutions, corporate pension trust funds, dealers and brokers, 
certain government deposit accounts and government-sponsored agencies, and investments of foreign balances and inter- 
national accounts in the United States. 

Note.— Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis; beginning October 1976 (fiscal year 
1977), the fiscal year is on an October 1 - September 30 basis. 

Source: Department of the Treasury. 



272 



Table B-78. — Average length and maturity distribution of marketable interest-bearing public 
debt securities held by private investors, 1967-78 



End of year er month 



Amount 

out- 
standing 
privately 

held 



Fiscal year: 

1967 150,321 

1968 159,671 

1969 156,008 



1970 157,910 

1971 161,863 

1972 165,978 

1973 167,869 

1974 164,862 



1975 210,382 

1976 279,782 



1977. 
1978. 



1977: Jan.. 
Feb. 
Mar. 
Apr. 
May. 
June. 

July. 
Aug. 
Sept. 
Oct.. 
Nov.. 
Dec.. 



1978: Jan.. 
Feb.. 
Mar.. 
Apr.. 
May- 
June. 

July. 
Aug. 
Sept. 
Oct. . 

Nov.. 
Dec. 



326, 674 
356, 501 

313, 497 
319, 982 
323, 604 
318, 699 
318,619 
313,485 

316, 177 

325, 001 

326, 674 
338, 290 
343, 870 
343,019 

355, 374 
358, 320 
362, 693 
355, 144 

356, 892 
353, 660 

358, 255 
359,919 
356, 501 
362, 443 
367, 256 
365, 239 



Maturity class 



Within 
1 year 



lto5 
years 



5 to 10 
years 



10 to 20 
years 



Millions of dollars 



20 vears 
and over 



56, 561 


53, 584 


21,057 


6,153 


66, 746 


52, 295 


21,850 


6,110 


69,311 


50, 182 


18, 078 


6,097 


76, 443 


57, 035 


8,286 


7,876 


74, 803 


58, 557 


14, 503 


6,357 


79, 509 


57,157 


16,033 


6,358 


84, 041 


54, 139 


16, 385 


8,741 


87, 150 


50, 103 


14, 197 


9,930 


115,677 


65, 852 


15,385 


8,857 


151,723 


89, 151 


24, 169 


8,087 


161, 329 


113,319 


33, 067 


8,428 


163, 819 


132,993 


33, 500 


11,383 


162, 633 


101,626 


33, 688 


7,342 


165, 942 


106, 685 


31, 204 


7,291 


166, 427 


109, 983 


31,155 


7,236 


162,419 


106, 929 


33, 469 


7,172 


162,211 


106, 823 


32, 658 


7,180 


157, 353 


107, 000 


32, 442 


7,092 


160, 332 


105, 255 


32, 521 


8,440 


161,932 


110,681 


33, 260 


8,512 


161, 329 


113,319 


33, 067 


8,428 


167,699 


115,744 


35,913 


8,406 


169, 552 


121,346 


32, 858 


8,364 


171,376 


118,975 


32, 729 


8,293 


177,642 


123, 692 


32,712 


9,733 


175,195 


130,715 


29, 853 


9,719 


178, 474 


132, 501 


29,414 


9,635 


170,272 


130, 884 


31,816 


9,571 


166,094 


135, 524 


31, 758 


9,847 


162, 533 


137, 543 


30,458 


9,766 


163,619 


139,017 


30, 573 


11,512 


163,512 


136,462 


33, 603 


11,407 


163,819 


132,993 


33, 500 


11,383 


165, 337 


136,064 


33, 476 


12, 746 


170, 492 


133,876 


33, 695 


13,879 


174,231 


128, 293 


33, 604 


13,833 



12,968 
12,670 
12,337 

8,272 
7,645 
6,922 
4,564 
3,481 

4,611 
6,652 
10,531 
14, 805 

8,208 
8,860 
8,803 
8,709 
9,746 
9,598 

9,628 
10,616 
10,531 
10,529 
11,750 
11,646 

11,595 
12,838 
12,669 
12,601 
13,668 

13, 360 

13,533 

14, 936 
14,805 
14,820 
15,314 
15,278 



Average length 



Years 



Months 



Note.— All issues classified to final maturity. 

Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis, beginning October 1976 (fiscal year 1977), the 
fiscal year is on an October 1-September 30 basis. 

Source: Department cf the Treasury. 



273 



CORPORATE PROFITS AND FINANCE 

Table B-79. — Corporate profits by industry, 1929-78 
[Billions of dollars; quarterly data at seasonally adjusted annual rates] 





Corporate profits w.th in 


ventory valuation adjustment and without capital consumption adjustment 






Domestic industries 




Year or 






Financial 1 






Nonfinancial 




























Rest 




Total 


Total 




Federal 






Manu- 


Whole- 
sale 






of the 
world 








Total 


Reserve 
banks 


Other 


Total 


factur- 
ings 


and 
retail 
trade 


Utilities s 


Other 




1929 


10.5 


10.2 


1.3 


0.0 


1.3 


8.9 


5.2 


1.0 


1.8 


0.9 


0.2 


1933 


-1.2 


-1.2 


.3 


.0 


.3 


-1.5 


-.4 


-.5 


.0 


-.7 


.0 


1939 


6.3 


6.1 


.8 


.0 


.8 


5.3 


3.3 


.7 


1.0 


.3 


.2 


1940 


9.8 


9.6 


1.0 


.0 


.9. 


8.6 


5.5 


1.2 


1.3 


.6 


.2 


1941 


15.2 


15.0 


1.1 


.0 


1.0 


14.0 


9.5 


1.4 


2.0 


1.1 


.2 


1942 


20.3 


20.1 


1.2 


.0 


1.2 


18.9 


11.8 


2.2 


3.4 


1.5 


.2 


1943 


24.4 


24.1 


1.3 


.0 


1.3 


22.8 


13.8 


3.0 


4.4 


1.6 


.2 


1944 


23.8 


23.5 


1.6 


.1 


1.6 


21.9 


13.2 


3.2 


3.9 


1.6 


.3 


1945 


19.2 


18.9 


1.7 


.1 


1.6 


17.3 


9.7 


3.3 


2.7 


1.5 


.2 


1946 


19.3 


18.9 


2.1 


.1 


2.0 


16.8 


9.0 


3.8 


1.8 


2.1 


.4 


1947 


25.6 


24.9 


1.7 


.1 


1.6 


23.2 


13.6 


4.6 


2.2 


2.9 


• .7 


1948 


33.0 


32.2 


2.6 


.2 


2.3 


29.6 


17.6 


5.5 


3.0 


3.6 


.8 


1949 


30.8 


29.9 


3.1 


.2 


2.9 


26.8 


16.2 


4.5 


3.0 


3.1 


.8 


1950 


37.6 


36.7 


3.1 


.2 


3.0 


33.5 


20.9 


5.0 


4.0 


3.6 


1.0 


1951 


42.7 


41.5 


3.6 


.3 


3.3 


37.9 


24.6 


5.0 


4.6 


3.7 


1.2 


1952 


39.8 


38.7 


4.0 


.4 


3.7 


34.7 


21.7 


4.8 


4.9 


3.3 


1.1 


1953 


39.5 


38.4 


4.5 


.4 


4.1 


33.9 


22.0 


3.8 


5.0 


3.1 


1.1 


1954 


37.8 


36.4 


4.6 


.3 


4.3 


31.8 


19.9 


3.8 


4.7 


3.4 


1.4 


1955 


46.7 


45.1 


4.8 


.3 


4.5 


40.3 


26.0 


5.0 


5.6 


3.6 


1.6 


1956 


45.9 


44.1 


5.0 


.5 


4.5 


39.1 


24.7 


4.5 


5.9 


4.1 


1.8 


1957 


45.4 


43.5 


5.2 


.6 


4.6 


38.3 


24.0 


4.4 


5.8 


4.0 


1.9 


1958 


40.8 


39.1 


5.7 


.6 


5.1 


33.5 


19.4 


4.6 


5.9 


3.6 


1.7 


1959 


51.2 


49.4 


6.8 


.7 


6.0 


42.6 


26.2 


5.9 


7.0 


3.5 


1.8 


1960 


48.9 


47.0 


7.2 


1.0 


6.2 


39.8 


23.9 


4.9 


7.4 


3.5 


1.9 


1961 


48.7 


46.3 


7.0 


.8 


6.3 


39.3 


23.0 


4.9 


7.8 


3.6 


2.3 


1962 


53.7 


51.1 


7.3 


.9 


6.4 


43.8 


26.0 


5.7 


8.4 


3.8 


2.6 


1963 


57.6 


54.9 


6.8 


1.0 


5.8 


48.1 


28.7 


5.9 


9.3 


4.2 


2.6 


1964 


64.2 


61.0 


6.9 


1.1 


5.8 


54.1 


31.9 


7.4 


9.9 


4.9 


3.1 


1965 


73.3 


70.1 


7.5 


1.4 


6.2 


62.5 


38.3 


7.9 


11.0 


5.3 


3.3 


1966 


78.6 


75.9 


8.5 


1.7 


6.8 


67.4 


41.6 


8.0 


11.8 


6.0 


2.8 


1967 


75.6 


72.6 


9.0 


2.0 


7.0 


63.6 


37.9 


8.9 


10.7 


6.1 


3.0 


1968 


82.1 


78.9 


10.4 


2.5 


7.9 


68.5 


41.2 


10.1 


10.7 


6.5 


3.2 


1969 


77.9 


74.2 


11.3 


3.1 


8.2 


62.9 


36.8 


10.1 


10.2 


5.8 


3.7 


1970 


66.4 


62.6 


12.6 


3.6 


9.0 


50.1 


27.1 


9.4 


8.2 


5.3 


3.8 


1971 


76.9 


72.4 


14.1 


3.3 


10.8 


58.2 


32.4 


11.7 


8.3 


5.8 


4.6 


1972 


89.6 


84.7 


15.4 


3.4 


12.1 


69.3 


40.6 


13.3 


9.0 


6.4 


4.8 


1973 


97.2 


90.4 


16.2 


4.5 


11.7 


74.1 


44.1 


14.7 


8.3 


7.0 


6.8 


1974 


86.5 


76.9 


H.4 


5.7 


8.7 


62.5 


36.6 


12.9 


5.6 


7.4 


9.6 


1975 


107.9 


101.8 


13.0 


5.7 


7.3 


88.9 


48.3 


20.7 


9.2 


10.7 


6.1 


1976 


141.4 


133.2 


17.5 


6.0 


11.6 


115.6 


65.6 


24.0 


13.7 


12.4 


8.2 


1977 


159.1 


149.5 


20.9 


6.2 


14.6 


128.6 


74.7 


24.0 


16.1 


13.8 


9.6 


1978 v 


178 1 


168 1 


25 4 


7 6 


17 8 


142 8 


84.7 








10.0 


1976: 1 


141.2 


132.3 


15.8 


6.0 


9.9 


116.4 


67.0 


25.5 


12.4 


11.5 


8.9 


II.— 


143.0 


135.4 


17.0 


5.9 


11.1 


118.4 


67.5 


24.5 


14.3 


12.2 


7.6 


III... 


144.5 


136.3 


18.3 


6.0 


12.3 


118.0 


65.9 


24.5 


14.9 


12.7 


8.2 


IV.... 


137.0 


128.7 


19.1 


6.1 


13.0 


109.7 


61.9 


21.4 


13.3 


13.0 


8.2 


1977: 1 


144.5 


134.8 


19.7 


6.0 


13.7 


115.1 


66.4 


20.6 


15.4 


12.7 


9.7 


II.... 


158.5 


148.1 


19.9 


6.2 


13.7 


128.1 


77.4 


22.8 


14.5 


13.5 


10.4 


III... 


169.9 


159.5 


21.9 


6.2 


15.7 


137.6 


74.7 


30.6 


17.5 


14.7 


10.3 


IV.... 


163.5 


155.6 


21.9 


6.4 


15.5 


133.7 


80.2 


22.1 


17.1 


14.3 


7.9 


1978: 1 


148.7 


139.2 


22.7 


6.9 


15.7 


116.6 


69.8 


16.7 


17.3 


12.8 


9.4 


II—. 


180.6 


168.9 


24.3 


7.3 


17.0 


144.6 


87.8 


22.0 


19.3 


15.4 


11.7 


III... 


184.5 


175.4 


26.0 


8.0 


18.0 


149.4 


87.1 


25.8 


20.7 


15.8 


9.1 



See next page for continuation of table. 



274 



Table B-79. — Corporate profits by industry, 1929-78 — Continued 
(Billions of dollars; quarterly data at seasonally adjusted annual rates] 





Corporate profits before deduction of 


:apital consumption allowances, with inventory valuation adjustment 












Dorm 


stic indu 


tries 
















Financial 






Nonfinancial 






Year or 
























quarter 


















Rest 




Total 


Total 




Federal 






Manu- 


Whole- 
sale 


Utili- 
ties 3 




of the 
world 








Total 


Reserve 


Other 


Total 


factur- 


and 


Other 












banks 






ing 2 


retail 






















trade 








1929 


14.7 


14.4 


1.4 


0.0 


1.4 


13.0 


7.1 


1.3 


2.9 


1.7 


0.2 


1933 


2.6 


2.6 


.4 


.0 


.4 


2.2 


1.3 


-.2 


1.1 


.0 


.0 


1939 


10.1 


9.9 


.9 


.0 


.9 


9.0 


4.9 


1.0 


2.0 


1.1 


.2 


1940 


13.6 


13.4 


1.1 


.0 


1.1 


12.3 


7.2 


1.5 


2.3 


1.4 


.2 


1941 


19.5 


19.3 


1.2 


.0 


1.2 


18.1 


11.4 


1.7 


3.1 


1.9 


.2 


1942 


25.4 


25.2 


1.3 


.0 


1.3 


23.9 


14.2 


2.6 


4.8 


2.2 


.2 


1943 


29.7 


29.5 


1.4 


.0 


1.4 


28.1 


16.6 


3.3 


5.8 


2.4 


.2 


1944 


29.9 


29.6 


1.7 


.1 


1.6 


27.9 


16.5 


3.5 


5.5 


2.4 


.3 


1945 


25.5 


25.3 


1.7 


.1 


1.6 


23.6 


13.0 


3.6 


4.6 


2.3 


.2 


1946 


24.0 


23.6 


2.2 


.1 


2.1 


21.4 


11.2 


4.2 


3.0 


2.9 


.4 


1947. 


31.4 


30.7 


1.8 


.1 


1.7 


28.9 


16.3 


5.2 


3.6 


3.8 


.7 


1948 


40.0 


39.2 


2.7 


.2 


2.5 


36.5 


20.8 


6.2 


4.7 


4.8 


.8 


1949 


38.7 


37.9 


3.3 


.2 


3.0 


34.6 


19.8 


5.4 


4.8 


4.6 


.8 


1950 


46.5 


45.5 


3.3 


.2 


3.1 


42.2 


24.9 


6.0 


6.1 


5.2 


1.0 


1951 


53.0 


51.8 


3.8 


.3 


3.5 


48.0 


29.1 


6.2 


7.1 


5.6 


1.2 


1952 


51.3 


50.2 


4.2 


.4 


3.9 


46.0 


26.9 


6.1 


7.6 


5.4 


1.1 


1953 


52.7 


51.6 


4.8 


.4 


4.4 


46.8 


28.3 


5.1 


8.1 


5.3 


1.1 


1954 


52.8 


51.4 


4.9 


.3 


4.6 


46.5 


27.1 


5.2 


8.2 


5.9 


1.4 


1955 


64.1 


62.6 


5.2 


.3 


4.8 


57.4 


34.3 


6.7 


9.8 


6.6 


1.6 


1956 


64.9 


63.1 


5.4 


.5 


4.9 


57.7 


33.6 


6.3 


10.3 


7.4 


1.8 


1957 


66.3 


64.4 


5.7 


.6 


5.0 


58.7 


33.9 


6.5 


10.5 


7.8 


1.9 


1958 


62.9 


61.2 


6.1 


.6 


5.5 


55.0 


29.8 


6.6 


10.9 


7.6 


1.7 


1959 


74.8 


73.0 


7.3 


.7 


6.5 


65.7 


37.1 


8.0 


12.5 


8.0 


1.8 


1960 


74.1 


72.2 


7.8 


1.0 


6.8 


64.4 


35.5 


7.3 


13.3 


8.4 


1.9 


1961 


75.3 


72.9 


7.7 


.8 


6.9 


65.3 


35.2 


7.4 


14.0 


8.8 


2.3 


1962 


84.2 


81.5 


8.0 


.9 


7.1 


73.6 


40.2 


8.4 


15.4 


9.6 


2.6 


1963 


90.0 


87.4 


7.6 


1.0 


6.6 


79.8 


43.9 


8.7 


16.8 


10.4 


2.6 


1964 


98.7 


95.6 


7.9 


1.2 


6.7 


87.7 


48.0 


10.4 


17.9 


11.4 


3.1 


1965 


110.8 


107.5 


8.5 


1.4 


7.2 


99.0 


55.9 


11.1 


19.6 


12.3 


3.3 


1966 


119.3 


116.5 


9.6 


1.7 


7.9 


106.9 


60.5 


11.5 


21.3 


13.6 


2.8 


1967 


119.7 


116.7 


10.2 


2.0 


8.2 


106.5 


58.7 


12.7 


21.0 


14.1 


3.0 


1968 


130.2 


127.0 


11.8 


2.5 


9.3 


115.1 


63.9 


14.3 


21.9 


15.0 


3.2 


1969 


130.9 


127.2 


13.0 


3.1 


9.9 


114.2 


61.5 


14.9 


22.4 


15.4 


3.7 


1970 


123.0 


119.2 


14.5 


3.6 


11.0 


104.7 


53.1 


14.7 


21.4 


15.5 


3.8 


1971 


137.8 


133.3 


16.3 


3.4 


13.0 


116.9 


59.8 


17.5 


23.2 


16.4 


4.6 


1972 


157.4 


152.6 


18.0 


3.4 


14.7 


134.6 


69.9 


20.2 


26.3 


18.3 


4.8 


1973 


170.9 


164.1 


19.5 


4.5 


14.9 


144.6 


75.0 


22.1 


27.4 


20.2 


6.8 


1974 


168.1 


158.5 


18.3 


5.7 


12.6 


140.2 


70.5 


21.3 


26.7 


21.7 


9.6 


1975 


197.2 


191.1 


17.3 


5.7 


11.6 


173.8 


85.2 


29.9 


32.3 


26.4 


6.1 


1976 


238.5 


230.3 


22.3 


6.0 


16.3 


208.0 


105.5 


34.9 


38.5 


29.1 


8.2 


1977 


265.1 


255.5 


26.0 


6.2 


19.8 


229.5 


118.6 


36.2 


42.9 


31.8 


9.6 


1978 p 


292.5 
235.1 


282.5 
226.2 


31.0 
20.4 


7.7 
6.0 


23.3 

14.4 


251.5 
205.8 


132.1 
105.7 








10.0 


1976: 1 


35.8 


36.4 


27.9 


8.9 


IL... 


238.9 


231.3 


21.7 


5.9 


15.8 


209.6 


106.6 


35.3 


38.9 


28.8 


7.6 


III... 


242.6 


234.4 


23.1 


6.0 


17.1 


211.3 


106.3 


35.7 


39.9 


29.5 


8.2 


IV.... 


237.5 


229.2 


24.0 


6.1 


17.9 


205.3 


103.4 


32.9 


38.8 


30.2 


8.2 


1977: 1 


246.5 


236.8 


24.7 


6.0 


18.7 


212.1 


108.7 


32.4 


40.9 


30.2 


9.7 


II.... 


263.5 


253.1 


25.1 


6.2 


18.8 


228.0 


120.7 


34.8 


41.1 


31.4 


10.4 


III... 


277.5 


267.1 


27.1 


6.2 


20.9 


240.0 


119.4 


43.0 


44.8 


32.8 


10.3 


IV.... 


272.8 


265.0 


27.2 


6.4 


20.8 


237.7 


125.5 


34.8 


44.8 


32.6 


7.9 


1978: 1 


260.0 


250.6 


28.1 


7.0 


21.1 


222.5 


116.0 


29.8 


45.3 


31.4 


9.4 


Il..„ 


294.0 


282.2 


29.8 


7.3 


22.5 


252.4 


134.8 


35.5 


47.7 


34.4 


11.7 


III... 


299.9 


290.8 


31.6 


8.0 


23.6 


259.2 


134.9 


39.7 


49.5 


35.0 


9.1 



1 Consists of the following industries: Banking; credit agencies other than banks; security and commodity brokers, 
dealers, and services; insurance carriers; regulated investment companies; small business investment companies; and 
real estate investment trusts. 

2 See Table B 80 for industry detail. 

3 Consists of transportation, communication, and electric, gas, and sanitary services. 

Note.— The industry classification is on a company basis and is based on the 1972 Standard Industrial Classification 
(SIC) beginning 1948, and on the 1942 SIC prior to 1948. 

Source: Department of Commerce, Bureau of Economic Analysis. 

275 



Table B-80. — Corporate profits of manufacturing industries, 1929-78 
[Billions of dollars; quarterly data at seasonally adjusted annual rates) 





Corporate profits with inventory valuation adjustment and without capital consumption adjustment 




Total 
manu- 
factur- 
ing 


Nondurable goods 






D 


jrable goods 






Year or 
quarter 


Total 


Food 
and 
kindred 
prod- 
ucts 


Chem- 
icals 
and 
allied 


Petro- 
leum 
and 
coal 


Other 


Total 


Primary 
metal 
indus- 


Fabri- 
cated 
metal 


Machin- 
ery, 
except 
electri- 
cal 


Electric 
and 
elec- 


Motor 

vehicles 

and 


Other 








prod- 
ucts 


prod- 
ucts 






tries 


products 


equip- 
ment 


equip- 
ment 




1929 


5.2 

-.4 

3.3 

5.5 
9.5 
11.8 
13.8 
13.2 
9.7 
9.0 
13.6 
17.6 


2.6 

.0 

1.7 

2.4 
3.1 
4.6 
5.7 
5.9 
5.2 
6.6 
7.8 
10.0 










2.6 

-.4 

1.7 

3.1 
6.4 
7.2 
8.1 
7.4 
4.5 
2.4 
5.8 
7.5 














1933 






















1939 






















1940 






















1941 






















1942 






















1943 






















1944 






















1945 






















1946 






















1947 






















1948 


1.9 


1.7 


2.8 


3.7 


1.6 


0.8 


1.2 


0.7 


1.4 


1.8 


1949 


16.2 


8.1 


1.6 


1.8 


1.9 


2.8 


8.1 


1.5 


.7 


1.3 


.8 


2.1 


1.7 


1950 


20.9 


8.9 


1.6 


2.3 


2.3 


2.7 


12.0 


2.3 


1.1 


1.6 


1.2 


3.1 


2.6 


1951 


24.6 


11.4 


1.4 


2.8 


2.7 


4.4 


13.2 


3.1 


1.3 


2.3 


1.3 


2.4 


2.8 


1952 


21.7 


9.9 


1.7 


2.3 


2.3 


3.6 


11.7 


1.9 


1.0 


2.3 


1.5 


2.4 


2.6 


1953 


22.0 


10.1 


1.8 


2.2 


2.8 


3.3 


11.9 


2.5 


1.0 


1.9 


1.4 


2.6 


2.6 


1954 


19.9 


9.4 


1.6 


2.2 


2.7 


2.9 


10.5 


1.7 


.9 


1.7 


1.2 


2.1 


2.9 


1955 


26.0 


11.8 


2.2 


3.0 


3.0 


3.6 


14.3 


2.9 


1.0 


1.7 


1.1 


4.1 


3.5 


1956 


24.7 


11.9 


1.8 


2.8 


3.3 


4.1 


12.8 


3.0 


1.1 


2.1 


1.2 


2.2 


3.2 


1957 


24.0 


10.7 


1.8 


2.8 


2.6 


3.6 


13.3 


3.0 


1.1 


2.0 


1.5 


2.6 


3.1 


1958 


19.4 


10.0 


2.1 


2.5 


2.1 


3.3 


9.3 


1.9 


.9 


1.4 


1.3 


.9 


2.9 


1959 


26.2 


12.7 


2.6 


3.4 


2.5 


4.2 


13.5 


2.3 


1.1 


2.1 


1.7 


2.9 


3.4 


1960 


23.9 


11.9 


2.1 


3.1 


2.5 


4.2 


12.0 


2.1 


.9 


1.8 


1.3 


3.0 


2.9 


1961 


23.0 


11.7 


2.3 


3.1 


2.2 


4.0 


11.3 


1.5 


1.0 


1.8 


1.3 


2.5 


3.1 


1962 


26.0 


11.9 


2.3 


3.2 


2.1 


4.3 


14.1 


1.6 


1.2 


2.3 


1.5 


4.0 


3.5 


1963 


28.7 


12.8 


2.7 


3.6 


2.1 


4.5 


15.9 


1.9 


1.2 


2.4 


1.5 


4.9 


3.9 


1964 


31.9 


14.4 


2.8 


3.9 


2.4 


5.3 


17.5 


2.4 


1.4 


3.1 


1.6 


4.7 


4.2 


1965 


38.3 


15.8 


2.6 


4.5 


2.8 


5.8 


22.6 


3.1 


2.0 


3.8 


2.5 


6.1 


5.0 


1966 


41.6 


18.0 


3.3 


4.8 


3.2 


6.7 


23.5 


3.6 


2.4 


4.4 


3.0 


5.1 


5.1 


1967 


37.9 


17.3 


3.1 


4.2 


3.8 


6.2 


20.6 


2.7 


2.4 


4.0 


2.9 


3.9 


4.7 


1268 


41.2 


18.8 


3.2 


5.0 


3.6 


7.0 


22.4 


2.0 


2.4 


4.1 


2.8 


5.5 


5.7 


1969 


36.8 


17.7 


2.9 


4.6 


3.3 


6.9 


19.2 


1.4 


2.0 


3.6 


2.2 


4.8 


5.2 


1970 


27.1 


16.8 


3.5 


3.9 


3.6 


5.8 


10.3 


.9 


1.2 


2.7 


1.1 


1.4 


3.0 


1971 


32.4 


17.3 


3.3 


4.2 


3.6 


6.2 


15.1 


.5 


1.3 


2.7 


1.8 


4.9 


3.8 


1972 


40.6 


18.1 


2.8 


5.0 


3.5 


6.8 


22.5 


1.6 


2.1 


3.9 


2.9 


5.9 


6.0 


1973 


44.1 


20.1 


2.2 


5.8 


4.9 


7.2 


24.0 


2.0 


2.6 


4.5 


2.6 


5.8 


6.6 


1974 


36.6 


25.1 


3.0 


5.1 


10.2 


6.8 


11.5 


4.9 


1.2 


1.5 


.3 


.2 


3.4 


1975 


48.3 


30.1 


7.9 


5.8 


8.1 


8.2 


18.3 


2.9 


2.9 


4.3 


2.1 


1.7 


4.3 


1976 


65.6 


37.5 


7.3 


7.9 


11.6 


10.6 


28.1 


2.0 


3.8 


5.6 


2.7 


7.4 


6.6 


1977 


74.7 


39.6 


5.7 


8.2 


12.8 


12.9 


35.1 


1.8 


4.0 


7.1 


3.9 


9.5 


8.8 


1978 v 


84.7 
67.0 


41.8 
39.6 










42.9 
27.4 














1976: 1... 


8.4 


8.4 


11.4 


11.5 


2.3 


3.7 


5.4 


2.7 


6.9 


6.3 


II.. 


67.5 


37.7 


7.0 


8.1 


11.4 


11.2 


?9.7 


2.8 


4.0 


5.4 


2.6 


7.9 


7.1 


ML. 


65.9 


37.4 


8.1 


7.9 


11.3 


10.1 


28.5 


1.7 


4.1 


5.7 


2.6 


7.6 


6.8 


IV.. 


61.9 


35.0 


5.8 


7.3 


12.4 


9.6 


26.9 


1.0 


3.6 


6.0 


2.7 


7.1 


6.4 


1977: 1... 


66.4 


36.4 


4.5 


8.2 


11.8 


12.0 


29.9 


1.0 


3.7 


5.9 


3.3 


8.8 


7.3 


II.. 


77.4 


40.2 


5.7 


8.5 


13.4 


12.6 


37.2 


2.9 


4.1 


6.8 


3.9 


11.0 


8.6 


III.. 


74.7 


40.6 


7.0 


7.9 


12.3 


13.4 


34.2 


.9 


3.9 


7.3 


4.1 


9.2 


8.7 


IV.. 


80.2 


41.1 


5.7 


8.2 


13.8 


13.4 


39.1 


2.4 


4.2 


8.5 


4.4 


9.1 


10.5 


1978: 1... 


69.8 


37.0 


4.3 


8.1 


10.4 


14.3 


32.8 


1.2 


3.2 


6.4 


4.3 


7.9 


9.7 


II.. 


87.8 


41.7 


5.4 


8.3 


14.4 


13.7 


46.1 


5.1 


4.3 


9.2 


4.8 


10.8 


11.9 


III.. 


87.1 


42.5 


6.6 


8.2 


14.6 


13.2 


44.6 


5.0 


4.7 


7.4 


5.8 


10.2 


11.7 



See next page for continuation of table. 



276 



Table B^80. — Corporate profits of manufacturing industries, 1929-78 — Continued 
[Billions of dollars; quarterly data at seasonally adjusted annual rates] 





Corporate profits before deduction of capital consumption allowances, with Inventory valuation adjustment 




Total 


Nondurable goods 


Durable goods 


Year or 


























quarter 


manu- 
factur- 
ing 


Total 


Food 
and 
kindred 
prod- 
ucts 


Chem- 
icals 
and 
allied 


Petro- 
leum 
and 
coal 


Other 


Total 


Primary 
metal 
indus- 


Fabri- 
cated 
metal 


Machin- 
ery, 
except 
electri- 
cal 


Electric 
and 
elec- 
tronic 


Motor 

vehicles 

and 


Other 








prod- 
ucts 


prod- 
ucts 






tries 


products 


equip- 
ment 


equip- 
ment 




1929.. .. 


7.1 

1.3 

4.9 

7.2 
11.4 
14.2 
16.6 
16.5 
13.0 
11.2 
16.3' 
20.8 


3.6 

1.1 

2.6 

3.4 
4.1 
5.9 
7.1 
7.5 
7.0 
7.9 
9.3 
11.8 










3.4 

.2 

2.3 

3.8 
7.2 
8.4 
9.5 
9.0 
6.0 
3.3 
6.9 
9.0 














1933 






















1939 






















1940 






















1941 






















1942 






















1943 






















1944 






















1945 






















1946 






















1947 






















1948 


2.2 


2.0 


3.4 


4.2 


1.9 


1.0 


1.5 


0.8 


1.6 


2.2 


1949 


19.8 


10.1 


2.0 


2.1 


2.6 


3.4 


9.7 


1.9 


.9 


1.6 


.9 


2.3 


2.1 


1950 


24.9 


11.1 


2.1 


2.7 


3.1 


3.3 


13.7 


2.8 


1.3 


1.9 


1.4 


3.3 


3.0 


1951 


29.1 


13.9 


2.0 


3.2 


3.6 


5.1 


15.3 


3.6 


1.5 


2.6 


1.5 


2.7 


3.3 


1952 


26.9 


12.7 


2.3 


2.8 


3.2 


4.4 


14.2 


2.6 


1.3 


2.7 


1.7 


2.7 


3.3 


1953 


28.3 


13.? 


2.3 


2.8 


3.9 


4.1 


15.0 


3.5 


1.2 


2.3 


1.6 


3.0 


3.3 


1954 


27.1 


13.1 


2.3 


3.0 


4.1 


3.8 


14.1 


2.9 


1.2 


2.2 


1.5 


2.5 


3.7 


1955 


34.3 


16.0 


2.9 


3.9 


4.6 


4.6 


18.3 


4.2 


1.4 


2.3 


1.5 


4.6 


4.4 


1956 


33.6 


16.5 


2.5 


3.8 


4.9 


5.2 


17.2 


4.3 


1.4 


2.8 


1.6 


2.9 


4.2 


1957 


33.9 


15.7 


2.6 


3.8 


4.4 


4.9 


18.2 


4.5 


1.5 


2.7 


2.0 


3.3 


4.2 


1958 


29.8 


15.4 


3.0 


3.6 


4.0 


4.7 


14.4 


3.2 


1.3 


2.2 


1.8 


1.6 


4.2 


1959 


37.1 


18.4 


3.6 


4.6 


4.5 


5.7 


18.7 


3.6 


1.5 


2.9 


2.2 


3.7 


4.8 


1960 


35.5 


17.8 


3.2 


4.4 


4.5 


5.8 


17.7 


3.4 


1.4 


2.7 


1.8 


4.0 


4.4 


1961 


35.2 


18.0 


3.4 


4.5 


4.3 


5.7 


17.2 


2.9 


1.5 


2.8 


1.9 


3.5 


4.6 


1962 


40.2 


19.1 


3.6 


4.8 


4.4 


6.2 


21.1 


3.3 


1.8 


3.4 


2.1 


5.2 


5.3 


1963 


43.9 


20.5 


4.0 


5.3 


4.7 


6.5 


23.3 


3.7 


1.9 


3.5 


2.2 


6.3 


5.7 


1964 


48.0 


22.6 


4.2 


5.7 


5.1 


7.5 


25.5 


4.3 


2.1 


4.3 


2.3 


6.3 


6.2 


1965 


55.9 


24.4 


4.0 


6.5 


5.8 


8.1 


31.4 


5.1 


2.7 


5.2 


3.3 


8.0 


7.1 


1966 


60.5 


27.2 


4.9 


6.8 


6.3 


9.2 


33.3 


5.7 


3.1 


5.8 


3.9 


7.5 


7.3 


1967 


58.7 


27.1 


4.7 


6.3 


7.2 


8.9 


31.6 


5.0 


3.3 


5.7 


3.9 


6.4 


7.3 


1968 


63.9 


29.3 


4.9 


7.3 


7.3 


9.9 


34.6 


4.5 


3.4 


6.0 


4.1 


8.1 


8.6 


1969 


61.5 


29.2 


4.8 


7.1 


7.1 


10.2 


32.3 


4.0 


3.0 


5.7 


3.7 


7.5 


8.4 


1970 


53.1 


29.0 


5.6 


6.6 


7.6 


9.2 


24.1 


3.5 


2.3 


5.2 


2.8 


3.8 


6.5 


1971 


59.8 


30.4 


5.5 


7.1 


7.9 


9.9 


29.4 


3.1 


2.4 


5.4 


3.7 


7.3 


7.5 


1972 


69 9 


32.2 


5.1 


8.2 


8.0 


10.8 


37.6 


4.1 


3.3 


6.8 


5.1 


8.4 


9.9 


1973 


75.0 


35.1 


4.8 


9.0 


9.7 


11.6 


39.9 


4.7 


3.8 


7.6 


4.9 


8.3 


10.6 


1974 


70.5 


40.8 


5.7 


8.6 


15.1 


11.5 


29.7 


8.1 


2.6 


4.9 


3.0 


3.1 


8.1 


1975 


85.2 


47.2 


10.9 


9.7 


13.3 


13.3 


38.0 


6.3 


4.5 


7.9 


5.0 


4.8 


9.5 


1976 


105.5 


56.5 


10.6 


12.5 


17.4 


16.0 


49.0 


5.6 


5.6 


9.7 


5.7 


10.7 


11.7 


1977 


118.6 


60.9 


9.3 


13.5 


19.3 


18.8 


57.7 


5.8 


5.9 


11.5 


7.3 


12.9 


14.3 


1978 »... 


132.1 
105.7 


65.1 
57.9 










67.0 
47.7 














1976: 1... 


11.5 


12.7 


17.0 


16.6 


5.9 


5.4 


9.3 


5.7 


10.0 


11.4 


II.. 


106.6 


56.5 


10.3 


12.6 


17.1 


16.5 


50.1 


6.4 


5.8 


9.3 


5.6 


11.0 


12.0 


III. 


106.3 


56.7 


11.3 


12.7 


17.1 


15.6 


49.6 


5.4 


5.8 


9.8 


5.7 


11.0 


11.8 


IV.. 


103.4 


54.8 


9.1 


12.1 


18.4 


15.2 


48.6 


4.8 


5.4 


10.2 


5.9 


10.8 


11.5 


1977: 1... 


108.7 


56.7 


8.0 


13.2 


17.8 


17.7 


52.0 


4.9 


5.5 


10.2 


6.6 


12.2 


12.6 


II.. 


120.7 


61.3 


9.2 


13.7 


19.7 


18.7 


59.3 


6.9 


5.9 


11.3 


7.2 


14.0 


14.1 


III. 


119.4 


62.2 


10.7 


13.2 


19.0 


19.3 


57.2 


4.9 


6.0 


11.9 


7.5 


12.6 


14.3 


IV.. 


125.5 


63.2 


9.4 


13.7 


20.5 


19.5 


62.4 


6.5 


6.2 


12.9 


8.0 


12.6 


16.1 


1978: 1... 


116.0 


59.6 


8.1 


13.7 


17.2 


20.6 


56.4 


5.4 


5.3 


11.1 


7.9 


11.3 


15.4 


II.. 


134.8 


64.8 


9.2 


14.2 


21.4 


20.0 


70.0 


9.4 


6.4 


14.0 


8.4 


14.2 


17.6 


III. 


134.9 


66.1 


10.6 


14.2 


21.7 


19.6 


68.8 


9.3 


6.8 


12.3 


9.4 


13.6 


17.3 



Note.— The industry classification is on a company basis and is based on the 1972 Standard Industrial Classification 
(SIC) beginning 1948, and on the 1942 SIC prior to 1948. 

Source: Department of Commerce, Bureau cf Economic Analysis. 



277 



Table B-81. — Corporate profits with inventory valuation and capital consumption adjustments 

1946-78 

[Billions of dollars; quarterly data at seasonally adjusted annual rates! 



Year or quarter 



1946... 
1947.... 
1948... 
1949.... 

1950.... 
1951.... 
1952.... 
1953.... 
1954.... 

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

I960.... 
1961.... 
1962.... 
1963.... 
1964.... 

1965.... 
1966.... 
1967.... 
1968.... 
1969.... 

1970.... 
1971.... 
1972.... 
1973.... 
1974.... 

1975.... 
1976.... 
1977.... 
1978 p.. 

1976: L. 
II. 
Ill 
IV 

1977: I.. 

Ill 

IV 

1978: I.. 
II. 
Ill 



Corporate 
profits with 
inventory 
valuation 
and capital 
consumption 
adjustments 



16.6 
22.2 
29.1 
26.9 

33.7 
38.1 
35.4 
35.5 
34.6 

44.6 
42.9 
42.1 
37.5 
48.2 

46.6 
46.9 
54.9 
59.6 
67.0 

77.1 
82.5 
79.3 
85.8 
81.4 

67.9 
77.2 
92.1 
99.1 
83.6 

95.9 
127.0 
144.2 
160.0 

126.8 
128.6 
130.0 
122.5 

129.9 
143.7 
154.8 
148.2 

132.6 
163.4 
165.2 



Corporate 

profits 
tax liability 



9.1 
11.3 
12.4 
10.2 

17.9 
22.6 
19.4 
20.3 
17.6 

22.0 
22.0 
21.4 
19.0 
23.6 

22.7 
22.8 
24.0 
26.2 
28.0 

30.9 
33.7 
32.5 
39.4 
39.7 

34.5 
37.7 
41.5 
48.7 
52.4 

49.8 
64.3 
71.8 
84.1 

63.6 
66.3 
64.7 
62.4 

68.3 
72.3 
72.8 
73.9 

70.0 
85.0 
86.2 



Profits after tax with inventory valuation 
and capital consumption adjustments 



Total 



7.5 
10.9 
16.7 
16.7 

15.7 
15.5 
16.0 
15.2 
17.0 

22.6 
20.9 
20.6 
18.5 
24.6 

23.9 
24.1 
30.9 
33.4 
39.0 

46.2 
48.9 
46.8 
46.4 
41.8 

33.4 
39.5 
50.5 
50.4 
31.2 

46.1 
62.7 
72.3 
76.0 

63.3 
62.3 
65.3 
60.1 

61.6 
71.4 
82.1 
74.3 

62.6 
78.4 
79.0 



Dividends 



5.6 
6.3 
7.0 
7.2 

8.8 
8.5 
8.5 
8.8 
9.1 

10.3 
11.1 
11.5 
11.3 
12.2 

12.9 
13.3 
14.4 
15.5 
17.3 

19.1 
19.4 
20.1 
21.9 
22.6 

22.9 
23.0 
24.6 
27.8 
31.0 

31.9 
37.9 
43.7 
49.3 

34.5 
37.2 
38.4 
41.4 

41.5 
42.7 
44.1 
46.3 

47.0 
48.1 
50.1 



Undistributed 
profits with 
inventory 
valuation 
and capital 
consumption 
adjustments 



2.0 
4.6 
9.7 
9.5 

6.9 
7.0 
7.5 
6.4 
7.9 

12.2 
9.8 
9.1 
7.2 

12.4 

11.0 
10.8 
16.5 
17.9 
21.7 

27.1 
29.4 
26.7 
24.4 
19.2 

10.5 
16. S 
25.9 
22.6 
.2 

14.2 
24.8 
28.7 
26.7 

28.7 
25.1 
26.9 
18.7 

20.1 
28.7 
38.0 
28.0 

15. ( 
30.3 
29.0 



Source: Department of Commerce, Bureau of Economic Analysis. 



278 



Table B-82. — Sales, profits, and stockholders' equity, all manufacturing corporations, 1947-78 

[Billions of dollars] 



All manufacturing 
corporations 



Sales 
(net) 



150.7 
165.6 
154.9 

181.9 
245.0 
250.2 
265.9 
248.5 

278.4 
307.3 
320.0 
305.3 
338.0 

345.7 
356.4 
389.9 
412.7 
443.1 

492.2 
554.2 
575.4 
631.9 
694.6 

708.8 

751.4 

849.5 

1.017.2 

275.1 



1, 060. 6 
1, 065. 2 
1,203.2 
1,328.1 

236.6 

242.0 
269.4 
272.1 
277.0 

247.1 
265.8 
271.0 
281.3 

284.2 
307.6 
301.6 
309.8 

311.5 
338.6 
331.7 
346.2 

340.4 
377.9 
377.1 



Profits 



Before 
income 
taxes > 



16.6 
18.4 
14.4 

23.2 
27.4 
22.9 
24.4 
20.9 

28.6 
29.8 
28.2 
22.7 
29.7 

27.5 
27.5 
31.9 
34.9 
39.6 

46.5 
51.8 
47.8 
55.4 
58.1 

48.1 
53.2 
63.2 
81.4 

21.4 



92.1 
79.9 
104.9 
115.1 

20.6 

21.2 
25.9 
25.0 
20.1 

15.4 
20.2 
21.7 
22.6 

24.5 
29.3 
26.2 
24.9 

25.6 
32.4 
27.3 
29.9 

26.9 
36.1 
33.5 



After 
income 
taxes 



10.1 
11.5 
9.0 

12.9 
11.9 
10.7 
11.3 
11.2 

15.1 
16.2 
15.4 
12.7 
16.3 

15.2 
15.3 
17.7 
19.5 
23.2 

27.5 
30.9 
29.0 
32.1 
33.2 

28.6 
31.3 
36.5 
48.1 

13.0 



58.7 
49.1 
64.5 
70.4 

13.2 

13.5 
16.3 
15.5 
13.4 

9.3 
12.4 
13.2 
14.2 

14.8 
18.1 
16.0 
15.6 

15.6 
19.7 
16.7 
18.4 

16.1 
22.2 
20.4 



Stock- 
holders' 
equity 2 



65.1 
72.2 
77.6 

83.3 
98.3 
103.7 
108.2 
113.1 

120.1 
131.6 
141.1 
147.4 
157.1 

165.4 
172.6 
181.4 
189.7 
199.8 

211.7 
230.3 
247.6 
265.9 
289.9 

306.8 
320.9 
343.4 
374.1 

386.4 



395.0 
423.4 
462.7 
496.7 

368.0 

379.0 
389.9 
402.7 
408.4 

410.7 
420.2 
427.4 
435.5 

446.5 
460.1 
468.9 
475.3 

479.8 
492.9 
502.4 
511.7 

519.3 
534.1 
548.8 



Durable goods industries 



Sales 
(net) 



66.6 
75.3 
70.3 

86.8 
116.8 
122.0 
137.9 
122.8 

142.1 
159.5 
166.0 
148.6 
169.4 

173.9 
175.2 
195.5 
209.0 
226.3 

257.0 
291.7 
300.6 
335.5 
366.5 

363.1 
382.5 
435.8 
527.3 

140.1 



529.0 
521.1 
589.6 
657.3 

122.7 

120.3 
136.8 
134.8 
137.1 

121.3 
132.4 
131.0 
136.3 

137.8 
153.7 
146.2 
151.8 

151.2 
169.5 
163.8 
172.7 

169.1 
194.1 
188.7 



Profits 


Before 


After 


income 


income 


taxes > 


taxes 


7.6 


4.5 


8.9 


5.4 


7.5 


4.5 


12.9 


6.7 


15.4 


6.1 


12.9 


5.5 


14.0 


5.8 


11.4 


5.6 


16.5 


8.1 


16.5 


8.3 


15.8 


7.9 


11.4 


5.8 


15.8 


8.1 


14.0 


7.0 


13.6 


6.9 


16.7 


8.6 


18.5 


9.5 


21.2 


11.6 


26.2 


14.5 


29.2 


16.4 


25.7 


14.6 


30.6 


16.5 


31.5 


16.9 


23.0 


12.9 


26.5 


14.5 


33.6 


18.4 


43.6 


24.8 


10.8 


6.3 


41.1 


24.7 


35.3 


21.4 


50.7 


30.8 


57.9 


34.8 


10.1 


6.2 


9.5 


5.7 


12.6 


7.6 


10.5 


6.2 


8.6 


5.2 


7.0 


4.1 


9.3 


5.7 


9.1 


5.5 


10.0 


6.2 


11.3 


6.7 


14.8 


9.0 


12.2 


7.4 


12.4 


7.7 


12.5 


7.5 


16.9 


10.2 


13.0 


7.8 


15.5 


9.4 


13.6 


7.9 


19.9 


12.0 


17.1 


10.3 



Stock- 
holders' 
equity 2 



Nondurable goods 
industries 



Sales 
(net) 



31.1 
34.1 
37.0 

39.9 
47.2 
49.8 
52.4 
54.9 

58.8 
65.2 
70.5 
72.8 
77.9 

82.3 
84.9 
89.1 
93.3 
98.5 

105.4 
115.2 
125.0 
135.6 
147.6 

155.1 
160.6 
171.4 
188.7 

194.7 



196.0 
208.1 
224.3 
239.9 

185.8 

189.4 
194.1 
199.9 
200.8 

201.7 
207.3 
209.7 
213.7 

216.7 
223.4 
227.1 
229.9 

230.8 
238.4 
243.1 
247.5 

251.1 
259.9 

267.7 



84.1 
90.4 
84.6 

95.1 
128.1 
128.0 
128.0 
125.7 

136.3 
147.8 
154.1 
156.7 
168.5 

171.8 
181.2 
194.4 
203.6 
216.8 

235.2 
262.4 
274.8 
296.4 
328.1 

345.7 
368.9 
413.7 
489.9 

135.0 



531.6 
544.1 
613.7 
670.8 

113.9 

121.7 
132.6 
137.3 
140.0 

125.8 
133.3 
140.0 
145.0 

146.3 
153.9 
155.4 
158.1 

160.3 
169.1 
167.9 
173.5 

171.3 
183.8 
188.5 



Profits 



Before 
income 
taxes l 



9.0 
9.5 
7.0 

10.3 
12.1 
10.0 
10.4 
9.6 

12.1 
13.2 
12.4 
11.3 
13.9 

13.5 
13.9 
15.1 
16.4 
18.3 

20.3 
22.6 
22.0 
24.8 
26.6 

25.2 
26.7 
29.6 
37.8 

10.6 



51.0 
44.6 
54.3 
57.2 

10.5 

11.7 

13.3 
14.5 
11.5 

8.4 
10.9 
12.7 
12.6 

13.2 
14.5 
14.0 
12.6 

13.0 
15.5 
14.3 
14.3 

13.3 
16.2 
16.4 



After 
income 
taxes 



5.6 
6.2 
4.6 

6.1 
5.7 
5.2 
5.5 
5.6 

7.0 
7.8 
7.5 
6.9 
8.3 

8.2 
8.5 
9.2 
10.0 
11.6 

13.0 
14.6 
14.4 
15.5 
16.4 

15.7 
16.7 
18.0 
23.3 

6.7 



34.1 
27.7 
33.7 
35.5 

7.0 

7.8 
8.7 
9.4 
8.2 

5.2 
6.8 
7.7 
8.1 

8.1 
9.1 
8.6 
7.9 

8.1 
9.5 
8.9 
9.0 

8.1 
10.2 
10.1 



Stock- 
holders' 
equity » 



1 In the old series, "income taxes" refers to Federal income taxes only, as State and local income taxes had already 
been deducted. In the new series, no income taxes have been deducted. 

2 Annual data are average equity for the year (using four end-of-quarter figures). 

Note.— Data are not necessarily comparable from one period to another due to changes in accounting procedures, 
industry classifications, sampling procedures, etc. For explanatory notes concerning compilation of the series, see "Quar- 
terly Financial Report for Manufacturing, Mining, and Trade Corporations," Federal Trade Commission. 

Source: Federal Trade Commission. 

279 



Table B-83. — Relation of profits after taxes to stockholders' equity and to sales, all manufac- 
turing corporations, 1947-78 



Year or quarter 


Ratio of profits after 

income taxes (annual rate) 

to stockholders' equity— percent 1 


Profits after income taxes 
per dollar of sales— cents 


All 
manufacturing 
corporations 


Durable 

goods 

industries 


Nondurable 

goods 
industries 


All 

manufacturing 

corporations 


Durable 

goods 

industries 


Nondurable 

goods 
industries 


1947 


15.6 

16.0 
11.6 

15.4 
12.1 
10.3 
10.5 
9.9 

12.6 
12.3 
10.9 
8.6 

10.4 

9.2 
8.9 
9.8 
10.3 
11.6 

13.0 
13.4 
11.7 
12.1 
11.5 

9.3 
9.7 
10.6 
12.8 

13.4 

14.9 
11.6 
13.9 
14.2 

14.3 

14.3 
16.7 
15.4 
13.2 

9.0 
11.8 
12.4 
13.1 

13.3 
15.7 
13.7 
13.1 

13.0 
16.0 
13.3 
14.4 

12.4 

16.6 
14.9 


14.4 
15.7 
12.1 

16.9 
13.0 
11.1 
11.1 
10.3 

13.8 
12.8 
11.3 
8.0 
10.4 

8.5 
8.1 
9.6 
10.1 
11.7 

13.8 
14.2 
11.7 
12.2 
11.4 

8.3 
9.0 
10.8 
13.1 

12.9 

12.6 
10.3 
13.7 
14.5 

13.3 

12.1 
15.6 
12.3 
10.4 

8.1 
10.9 
10.5 
11.6 

12.4 
16.1 
13.0 
13.4 

13.0 
17.1 
12.9 
15.1 

12.7 
18.5 
15.4 


16.6 
16.2 
11.2 

14.1 
11.2 
9.7 
9.9 
9.6 

11.4 
11.8 
10.6 
9.2 
10.4 

9.8 

9.6 
9.9 
10.4 
11.5 

12.2 
12.7 
11.8 
11.9 
11.5 

10.3 
10.3 
10.5 
12.6 

14.0 

17.1 
12.9 
14.2 
13.8 

15.3 

16.4 
17.8 
18.5 
15.8 

10.0 
12.8 
14.1 
14.5 

14.2 
15.4 
14.3 
12.9 

13.0 
15.0 
13.7 
13.7 

12.1 
14.8 
14.4 


6.7 
7.0 
5.8 

7.1 
4.8 
4.3 
4.3 
4.5 

5.4 
5.3 
4.8 
4.2 
4.8 

4.4 
4.3 
4.5 
4.7 
5.2 

5.6 
5.6 
5.0 
5.1 
4.8 

4.0 
4.1 
4.3 
4.7 

4.7 

5.5 
4.6 
5.4 
5.3 

5.6 

5.6 
6.0 
5.7 
4.8 

3.7 
4.7 
4.9 

5.1 

5.2 
5.9 
5.3 

5.0 

5.0 
5.8 
5.0 
5.3 

4.7 
5.9 
5.4 


6.7 
7.1 
6.4 

7.7 
5.3 
4.5 
4.2 
4.6 

5.7 
5.2 
4.8 
3.9 
4.8 

4.0 
3.9 
4.4 
4.5 
5.1 

5.7 
5.6 
4.8 
4.9 
4.6 

3.5 
3.8 
4.2 
4.7 

4.5 

4.7 
4.1 
5.2 
5.3 

5.0 

4.8 
5.5 
4.6 
3.8 

3.4 
4.3 
4.2 
4.5 

4.9 
5.8 
5.1 

5.1 

5.0 
6.0 
4.8 
5.4 

4.7 
6.2 
5.5 


6.7 


1948 


6.8 


1949 


5.4 


1950 


6.5 


1951 


4.5 


1952 


4.1 


1953 


4.3 


1954 


4.4 


1955 


5.1 


1956 


5.3 


1957 


4.9 


1958 


4.4 


1959 


4.9 


1960 


4.8 


1961 


4.7 


1962 


4.7 


1963 


4.9 


1964 


5.4 


1965 


5.5 


1966 


5.6 


1967 


5.3 


1968 


5.2 


1969 


5.0 


1970 


4.5 


1971.. 


4.5 


1972 


4.4 


1973 


4.8 


1973: IV 


5.0 


New series: 

1974 


6.4 


1975 


5.1 


1976 


5.5 


1977 


5.3 


1973: IV 


6.1 


1974: 1 


6.4 


II 


6.6 


Ill 

IV 


6.8 
5.9 


1975: 1 


4.1 


II 


5.1 


Ill 


5.5 


IV 


5.6 


1976: 1 


5.6 


II 


5.9 


III 


5.6 


IV 


5.0 


1977: 1 


5.0 


II 


5.6 


Ill 


5.3 


IV 


5.2 


1978: 1 


4.7 


II 


5.5 


III 


5.4 











i Annual ratios based on average equity for the year (using four end-of-quarter figures). Quarterly ratios based on equity 
at end of quarter only. 

Note.— Based on data in millions of dollars. 
See Note, Table B-82. 

Source: Federal Trade Commission. 



280 



Table B-84. — Relation of profits after taxes to stockholders' equity and to sales, all manufactur- 
ing corporations, by industry group, 1977—78 



Industry 



Ratio of profits after income 
taxes (annual rate) to stock- 
holders' equity— percent 1 



1977 



III IV 



1978 



II III 



Profits after income taxes per 
dollar of sales— cents 



1977 



III IV 



1978 



I II III 



All manufacturing corporations. 
Durable goods industries.. 



Stone, clay, and glass products. 
Primary metal industries 

Iron and steel 

Nonferrous metals 



Fabricated metal products 

Machinery, except electrical 

Electrical and electronic equipment. 
Transportation equipment.- 



Motor vehicles and equipment. 

Aircraft, guided missiles, and 

parts 



Instruments and related products. 
Other durable manufacturing prod- 
ucts 



Nondurable goods industries. 



Food and kindred products 

Tobacco manufactures 

Textile mill products 

Paper and allied products 

Printing and publishing 

Chemicals and allied products 3 ... 

Industrial chemicals and syn- 
thetics 

Drugs 



Petroleum and coal products 

Rubber and miscellaneous plastics 

Rroducts 
er nondurable manufacturing 
products. 



13.3 

12.9 

17 5 
-1.0 

-4.1 
4.9 

15.3 
16.3 
14.9 
12.2 

11.3 

14.7 

17.2 

18.5 

13.7 

13.1 
15.8 
9.7 
12.8 
17.8 
14.8 

12.3 
18.1 

13.7 

10.9 

11.1 



14.4 

15.1 

13.9 
5.5 

6.1 

4.4 

15.1 
17.8 
16.9 
16.6 

18.1 

15.0 

19.8 

15.4 

13.7 

13.6 
18.6 
11.1 
11.8 
20.8 
13.8 

11.9 
17.4 

12.9 

10.2 

15.5 



12.4 
12.7 

7.6 

3.9 

2.7 
6.1 

12.5 
14.4 
14.8 
16.0 

17.0 

14.4 

14.9 

12.9 

12.1 

11.4 
16.4 
9.0 
11.3 
14.6 
14.3 

13.1 
19.8 

10.9 

10.0 

14.0 



16.6 

18.5 

19.1 
12.6 

13.1 
11.6 

19.6 
20.3 
17.6 
19.6 

22.1 

18.0 

19.8 

20.6 

14.8 

15.4 
18.9 
13.2 
14.2 
19.8 
16.5 

14.8 
20.0 

13.2 

11.6 

13.1 



14.9 

15.4 

21.4 
10.0 

10.5 
9.1 

16.4 
16.1 
17.6 
12.8 

11.0 

17.6 

18.4 

18.4 

14.4 

13.4 
19.5 
11.8 
12.2 
18.5 
15.1 

13.2 
18.8 

14.1 

10.8 

16.9 



5.0 
4.8 

6.4 

-.4 

-1.7 
2.5 

4.7 
7.5 
5.2 
3.9 

3.8 

4.3 

9.1 

4.8 

5.3 

3.1 
8.1 
2.8 
5.4 
6.0 
7.1 

6.0 
12.1 

7.7 

3.6 

2.3 



5.3 

5.4 

5.3 
2.4 

2.5 
2.1 

4.6 
8.0 
5.8 
4.7 

5.2 

4.1 

10.3 

4.0 

5.2 

3.2 

9.2 
3.0 
4.9 
6.5 
6.8 

6.0 
11.7 

7.0 

3.3 

3.3 



4.7 

4.7 

3.3 
1.6 

1.1 
2.9 

4.0 
6.7 
5.2 
4.7 

5.1 

4.2 

8.2 

3.7 

4.7 

2.7 
9.0 
2.6 
4.9 
4.9 
6.8 

6.2 
12.9 

6.2 

3.3 

3.2 



5.9 

6.2 

6.7 
4.7 

4.6 
5.0 

5.6 
8.6 
5.9 
5.2 

6.0 

5.0 

10.0 

5.2 

5.5 

3.5 
9.9 
3.6 
5.7 
6.4 
7.4 

6.7 
13.5 

7.3 

3.5 

2.9 



5.4 

5.5 

7.5 
3.9 

3.9 
3.9 

4.8 
7.1 
6.1 
4.0 

3.6 

5.1 

9.3 

4.8 

5.4 

3.1 
10.1 
3.2 
5.0 
6.1 
7.1 

6.3 
12.5 

7.5 

3.4 

3.5 



> Ratios based on equity at end of quarter. 

1 Includes other industries not shown separately. 

Source: Federal Trade Commission. 



281 



Table B-85. — Sources and uses of funds, nonfarm nonfinancial corporate business, 1946-78 
[Billions of dollars; quarterly data at seasonally adjusted annual rate:) 





Sources 


Uses 






Total 


Internal 1 


External 


Total 


Pur- 
chase 

of 
physi- 
cal 
assets * 


In- 
crease 

in 
finan- 
cial 
assets 


Discrep- 
ancy 

(sources 
less 


Year or quarter 


Total 


Credit market funds 


Other 




Total 


Long- 
term 2 


Short- 
term ' 




1946 


18.4 
26.7 
28.5 
19.7 

41.8 
35.9 
29.2 
27.3 
29.1 

52.0 
44.0 
42.3 
41.3 
55.2 

47.6 
54.3 
58.8 
66.0 
72.3 

90.9 
96.9 
93.7 
114.5 
118.4 

104.3 
127.1 
161.7 
199.8 
190.8 

143.8 
205.0 
239.0 

244.3 
198.6 
266.0 
247.1 

283.9 
274.1 
289.4 


7.8 
12.6 
18.8 
19.3 

17.8 
19.7 
21.2 
21.1 
23.5 

28.8 
28.7 
30.4 
29.6 
35.0 

34.7 
35.3 
41.6 
44.5 
50.1 

56.1 
60.5 
61.3 
62.3 
61.7 

58.9 
68.6 
80.8 
83.8 
75.7 

106.8 
124.7 
135.3 

123.8 
134.9 
145.5 
137.3 

127.2 
144.1 
151.6 


10.6 
14.1 
9.8 

.4 

24.0 
16.2 
8.0 
6.1 
5.7 

23.2 
15.4 
11.9 
11.7 
20.2 

12.9 
19.1 
17.2 
21.4 
22.2 

34.9 
36.4 
32.4 
52.1 
56.7 

45.5 
58.5 
80.9 
115.9 
115.1 

37.0 
80.3 
103.6 

120.5 
63.7 
120.6 
109.9 

156.7 
130.0 
137.8 


6.9 
8.4 
6.5 
3.1 

8.1 
10.6 
9.5 
5.7 
6.4 

10.2 
12.9 
12.3 
10.5 
12.5 

11.9 
12.4 
12.3 
12.5 
14.7 

20.5 
25.5 
29.3 
31.8 
38.2 

40.7 
44.5 
58.3 
72.7 
81.8 

37.0 
58.2 
78.7 

75.9 
63.7 
80.1 
95.2 

102.2 
82.8 
80.2 


3.6 
5.4 
6.7 
4.9 

4.2 
6.4 
8.0 
6.0 
6.7 

6.4 
7.5 
10.4 
10.5 
8.1 

7.5 
10.8 
9.4 
8.4 
8.8 

9.3 
15.9 
21.6 
18.8 
20.7 

32.1 
40.6 
40.6 
37.0 
39.1 

49.3 
48.8 
46.2 

34.4 
35.3 
53.5 
61.5 

40.3 
53.7 
54.5 


3.3 

3.0 

-.2 

-1.8 

3.9 
4.1 
1.4 
-.3 
-.3 

3.8 
5.4 
1.9 

-.0 
4.4 

4.5 
1.6 
3.0 
4.0 
5.9 

11.2 
9.6 
7.8 
13.0 
17.6 

8.6 

3.9 

17.6 

35.7 

42.6 

-12.3 
9.5 
32.6 

41.6 
28.5 
26.6 
33.7 

61.9 
29.1 
25.7 


3.7 

5.8 

3.3 

-2.7 

15.9 

5.6 

-1.4 

.5 

-.8 

13.0 
2.5 

-.4 
1.2 
7.7 

1.0 
6.7 
4.9 
9.0 
7.4 

14.4 
10.9 
3.1 
20.3 
18.5 

4.8 
14.1 
22.7 
43.3 
33.4 

.0 
22.0 
24.9 

44.6 
-.0 
40.5 
14.7 

54.5 
47.2 
57.6 


17.1 
25.3 
24.9 
17.9 

39.9 
37.2 
29.1 
27.7 
27.7 

49.2 
41.1 
39.4 
38.7 
51.7 

40.6 
50.4 
54.9 
59.1 
64.1 

82.2 
90.5 
87.5 
105.3 
113.1 

95.9 
119.6 
145.8 
185.6 
179.0 

131.9 
184.9 
212.3 

214.6 
177.3 
234.6 
222.7 

263.3 
260.8 
272.6 


18.5 
17.0 
19.9 
14.4 

23.6 
29.8 
24.5 
25.4 
22.8 

32.7 
37.1 
35.2 
27.9 
37.5 

38.0 
37.2 
43.8 
44.9 
50.7 

62.0 
75.7 
73.0 
77.2 
84.3 

80.3 
86.0 
100.3 
123.3 
134.7 

99.9 
141.2 
164.6 

152.5 
162.4 
175.2 
168.0 

179.8 
199.9 
194.8 


-1.4 
8.4 
5.0 
3.5 

16.4 
7.4 
4.6 
2.3 
4.9 

16.5 
4.0 
4.2 
10.8 
14.2 

2.7 
13.2 
11.1 
14.2 
13.4 

20.2 
14.8 
14.5 
28.2 
28.8 

15.6 
33.6 
45.6 
62.3 
44.4 

32.0 
43.7 
47.8 

62.1 
14.9 
59.4 
54.7 

83.5 
61.0 
77.8 


1.3 


1947 


1.4 


1948 


3.6 


1949 


1.9 


1950 


1.9 


1951 


-1.3 


1952 


.1 


1953 


-.5 


1954 


1.4 


1955 


2.8 


1956 


3.0 


1957 


2.9 


1958 


2.5 


1959 


3.5 


1960 


7.0 


1961 


3.9 


1962 


3.9 


1963 


6.9 


1964 


8.2 


1965 


8.8 


1966 


6.4 


1967.. 


6.2 


1968 


9.1 


1969 


5.3 


1970 


8.4 


1971 


7.5 


1972 


15.9 


1973 


14.2 


1974.... 


11.8 


1975 


11.9 


1976 


20.1 


1977 


26.7 


1977:1 

II 

III 

IV 

1978: 1 


29.6 
21.3 
31.4 
24.4 

20.6 


II 

Ill 


13.2 
16.8 



1 Undistributed profits (after inventory valuation and capital consumption adjustments), capital consumption allowances, 
and foreign branch profits. 
1 Stocks, bonds, and mortgages. 

' Bank loans, commercial paper, finance company loans, bankers' acceptances, and Government loans. 
* Plant and equipment, residential structures, inventory investment, and mineral rights from U.S. Government. 

Source: Board of Governors of the Federal Reserve System. 



282 



Table B-86.— Current assets and liabilities of U.S. corporations, 1939-78 
[Billions of dollars] 





Current assets 


Current liabilities 


Net 

work- 
ing 
capital 




End of year 
or quarter 


Total 


Cash: 


U.S. 

Govern- 
ment 

securi- 
ties' 


Notes 
and 
accounts 
receiv- 
able 


Inven- 
tories 


Other 
current 
assets 


Total 


Notes 

and 

accounts 

payable 


Other 
current 
liabil- 
ities 


Cur- 
rent 
ratio 3 












All corporations * 










SEC series: 5 

1939 

1940 

1941 

1942 

1943 

1944 

1945 

1946 

1947 

1948 


54.5 

60.3 
72.9 
83.6 
93.8 
97.2 
97.4 
108.1 
123.6 
133.0 
133.1 

161.5 
179.1 
186.2 
190.6 
194.6 
224.0 
237.9 
244.7 
255.3 
277.3 

289.0 
306.8 


10.8 

13.1 
13.9 
17.6 
21.6 
21.6 
21.7 
22.8 
25.0 
25.3 
26.5 

28.1 
30.0 
30.8 
31.1 
33.4 
34.6 
34.8 
34.9 
37.4 
36.3 

37.2 
41.1 


2.2 

2.0 
4.0 
10.1 
16.4 
20.9 
21.1 
15.3 
14.1 
14.8 
16.8 

19.7 
20.7 
19.9 
21.5 
19.2 
23.5 
19.1 
18.6 
18.8 
22.8 

20.1 

20.0 


22.1 

24.0 
28.0 
27.3 
26.9 
26.5 
25.9 
30.7 
38.3 
42.4 
43.0 

56.8 
61.5 
67.4 
68.5 
73.6 
88.9 
97.7 
102.2 
109.7 
120.6 . 

129.2 
139.2 


18.0 

19.8 
25.6 
27.3 
27.6 
26.8 
26.3 
37.6 
44.6 
48.9 
45.3 

55.1 
64.9 
65.8 
67.2 
65.3 
72.8 
80.4 
82.2 
81.9 
88.4 

91.8 
95.2 


1.4 

1.5 
1.4 
1.3 
1.3 
1.4 
2.4 
1.7 
1.6 
1.6 
1.4 

1.7 
2.1 
2.4 
2.4 
3.1 
4.2 
5.9 
6.7 
7.5 
9.1 

10.6 
11.4 


30.0 

32.8 
40.7 
47.3 
51.6 
51.7 
45.8 
51.9 
61.5 
64.4 
60.7 

79.8 
92.6 
96.1 
98.9 
99.7 
121.0 
130.5 
133.1 
136.6 
153.1 

160.4 
171.2 


21.9 

23.2 
26.4 
26.0 
26.3 
26.8 
25.7 
31.6 
37.6 
39.3 
37.5 

48.3 
54.9 
59.3 
59.5 
61.7 
76.1 
83.9 
86.6 
90.4 
101.0 

106.8 
114.6 


8.1 

9.6 
14.3 
21.3 
25.3 
24.9 
20.1 
20.3 
23.9 
25.0 
23.3 

31.6 
37.8 
36.8 
39.4 
38.0 
45.0 
46.6 
46.5 
46.2 
52.0 

53.6 
56.6 


24.5 

27.5 
32.3 
36.3 
42.1 
45.6 
51.6 
56.2 
62.1 
68.6 
72.4 

81.6 
86.5 
90.1 
91.8 
94.9 
103.0 
107.4 
111.6 
118.7 
124.2 

128.6 
135.6 


1.817 

1.838 
1.791 
1.767 
1.818 
1.880 
2.127 
2.083 
2.010 
2.065 


1949 

1950 

1951 

1952 

1953 

1954 


2.193 

2.024 
1.934 
1.938 
1.927 
1.952 


1955 

1956 

1957 


1.851 
1.823 
1.838 


1958. 


1.869 


1959. 


1.811 


1960 


1.802 


1961 


1.792 








Nonfinancial corporations s 


SEC series: « 

1961 


254.7 
269.7 
288.2 
305.6 
336.0 
364.0 
386.2 
426.5 
473.6 

492.3 
529.6 
599.3 
697.8 
790.7 

734.6 
756.3 
823.1 
900.1 

842.0 
856.4 
880.3 
900.1 

924.2 
953.6 


34.8 
37.1 
39.8 
40.5 
42.8 
41.9 
45.5 
48.2 
47.9 

50.2 
53.3 
59.0 
66.3 
71.1 

73.0 
80.0 
86.8 
94.2 

80.8 
83.1 
83.4 
94.2 

88.5 
90.9 


16.5 
16.8 
16.7 
15.8 
14.4 
13.0 
10.3 
11.5 
10.6 

7.7 
11.0 
10.6 
12.8 
12.3 

11.3 
19.6 
26.0 
20.9 

26.8 
22.1 
21.5 
20.9 

20.9 
19.7 


97.9 
103.2 
110.5 
119.9 
134.1 
146.6 
155.3 
173.9 
197.0 

206.1 
221.1 
248.2 
288.5 
322.1 

265.5 
272.1 
292.4 
325.7 

304.1 
312.8 
326.9 
325.7 

338.3 
356.8 


95.0 
100.5 
106.8 
113.1 
126.6 
142.8 
153.1 
166.0 
186.4 

193.3 
200.4 
225.7 
263.9 
313.6 

318.9 
314.7 
341.4 
375.0 

352.1 
358.8 
367.5 
375.0 

389.7 
399.1 


10.5 
12.1 
14.4 
16.3 
18.1 
19.7 
22.0 
26.9 
31.6 

35.0 
43.8 
55.8 
66.4 
71.7 

65.9 
69.9 
76.4 
84.3 

78.3 
79.6 
81.0 
84.3 

86.8 
87.0 


123.7 
132.4 
145.5 
156.6 
178.8 
199.4 
211.3 
244.1 
287.8 

304.9 
326.0 
375.6 
450.9 
530.4 

451.8 
446.9 
487.5 
543.2 

502.6 
509.5 
528.9 
543.2 

570.4 
590.6 


84.4 
88.7 
97.0 
104.9 
121.5 
137.5 
147.1 
168.8 
199.2 

211.3 
220.5 
282.9 
340.3 
402.3 

272.3 
261.2 
273.2 
306.8 

280.2 
286.8 
297.8 
306.8 

317.2 
331.4 


39.3 
43.7 
48.5 
51.7 
57.3 
61.9 
64.2 
75.3 
88.6 

93.6 
105.5 

92.7 
110.7 
128.1 

179.5 
185.7 
214.2 
236.3 

222.4 
222.7 
231.1 
236.3 

253.2 
259.2 


131.0 
137.3 
142.7 
149.0 
157.2 
164.6 
174.9 
182.4 
185.7 

187.4 
203.6 
223.7 
246.9 
260.3 

282.8 
309.5 
335.6 
357.0 

339.5 
346.9 
351.4 
357.0 

353.8 
363.0 


2.059 


1962... 


2.037 


1963 


1.981 


1964 


1.951 


1965 


1.879 


1966 


1.825 


1967 


1.828 


1968 


1.747 


1969 


1.646 


1970 


1.615 


1971 


1.625 


1972 


1.595 


1973.... 


1.548 


1974 


1.491 


FTC-FRB series: 7 
1974 


1.626 


1975 


1.693 


1976 

1977 


1.688 
1.657 


1977: 1 

II 

III 

IV 

1978: 1 

II 


1.675 
1.681 
1.664 
1.657 

1.620 
1.615 



1 Includes time certificates of deposit. 

* Includes Federal agency issues. 

3 Total current assets divided by total current liabilities. 

< Excludes banks, savings and loan associations, and insurance companies. 

5 Based on data from "Statistics of Income," Department of the Treasury. 

6 Excludes banks, savings and loan associations, insurance companies, investment companies, finance companies 
(personal and commercial), real estate comparies, and security and commodity brokers, dealers, and exchanges. 

7 Based on data from "Quarterly Financial Report for Manufacturing, Mining, and Trade Corporations," Federal 
Trade Commission. See "Federal Reserve Bulletin," July 1978, for details regarding the series. 

Note.— SEC series not available after 1974. 

Sources: Board of Governors of the Federal Reserve System, Federal Trade Commission, and Securities and Exchange 
Commission. 

283 



Table B-87. — State and municipal and corporate securities offered, 1934-78 
[Millions of dollars] 



Year or quarter 



State and 
municipal 
securities 
offered 
for cash 
(principal 
amounts) 



939 

1,128 

1,238 
956 
524 
435 
661 

795 
1,157 
2,324 
2,690 
2,907 

3,532 
3,189 
4,401 
5,558 
6,969 

5,977 
5,446 
6,958 
7,449 
7,681 

7,230 
8,360 
8,558 
10, 107 
10, 544 

11,148 
11,089 
14, 288 
16, 374 
11,460 

17,762 
24, 370 
22, 941 
22, 953 
22, 824 

29, 326 

33, 845 
45, 060 

10, 533 
13, 353 
10,891 
10, 283 

10,316 
12,757 
11,994 



Corporate securities offered for cash 



Total 
corpo- 
rate 
offer- 
ings 



397 

2,164 

2,677 
2,667 
1,062 
1,170 
3,202 

6,011 
6,900 
6,577 
7,078 
6,052 

6,362 
7,741 
9,534 
8,898 
9,516 

10,240 
10, 939 
12,884 
11,558 
9,748 

10, 154 
13.165 
10, 705 
12,211 
13,957 

14, 782 
17, 385 
24, 014 
21,261 
25, 997 

37, 451 
43, 229 
39, 705 
31, 680 
37, 729 

52, 539 
52, 290 
52, 062 

12, 636 
13, 021 
11,408 
14, 997 

9,988 
12, 107 
10, 887 



Type of corporate security 



Com- 
mon 
stock 



108 
110 
34 
56 
163 

397 
891 
779 
614 
736 

811 

1,212 
1,369 
1,326 
1,213 

2,185 
2,301 
2,516 
1,334 
2,027 

1,664 
3,294 
1,314 
1,011 
2,679 

1,473 
1,901 
1,927 
3,885 
7,640 

7,037 
9,485 
10, 707 
7,642 
3,979 

7,414 
8,304 
8,135 

1,866 
2,167 
1,026 
3,076 

1,524 
1,707 
1,876 



Pre- 
ferred 
stock 



6 

98 

183 
167 
112 
124 
369 

758 
1,127 
762 
492 
425 

£31 
838 
564 
489 
816 

635 
636 
411 
571 
531 

409 
450 
422 
343 
412 

724 
580 
881 
636 
691 

1,390 
3,683 
3,371 
3,341 
2,253 

3,459 
2,803 
3,878 

840 

707 

1,189 

1,142 

457 

1,211 

341 



Bonds 
and 
notes 



372 

1,979 

2,386 

2,389 

917 

990 

2,670 

4,855 
4,882 
5,036 
5,973 
4,890 

4,920 
5,691 
7,601 
7,083 
7,488 

7,420 
8,002 
9,957 
9,653 
7,190 

8,081 
9,420 
8,969 
10, 856 
10,865 

12,585 
14, 904 
21,206 
16, 740 
17, 666 

29, 023 
30, 061 
25, 628 
20, 700 
31, 494 

41, 666 
41, 182 
40, 050 

9,930 
10, 148 

9,194 
10,778 

8,007 
9,189 
8,670 



Industry of corporate issuer 



Manu- 
fac- 
turing' 



604 

992 
848 
539 
510 
1,061 

2,026 
3,701 
2,742 
2,226 
1,414 

1,200 
3,122 
4,039 
2,254 
2,268 

2,994 
3,647 
4,234 
3,515 
2,073 

2,152 
4,077 
3,249 
3,514 
3,046 

5,414 
7,056 
11,069 
6,958 
6,346 

10, 647 
11,651 
6,398 
4,832 
10, 408 

18, 651 
15, 496 
13, 776 

3,030 
3,439 
3,252 
4,055 

2,218 
2,898 
2,534 



Elec- 
tric, 
gas, 
and 
water' 



133 

1,271 

1,203 

1,357 

472 

477 

1,422 

2,319 
2,158 
3,257 
2,187 
2,320 

2,649 
2,455 
2,675 
3,029 
3,713 

2,464 
2,529 
3,938 
3,804 
3,258 

2,851 
3,032 
2,825 
2,677 
2,760 

2,934 
3,666 
4,935 
5,293 
6,715 

11,009 
11,721 
11,314 
10, 269 
12, 837 

15, 894 
14 414 
13,711 

3,048 
4,126 
2,626 
3,911 

2,367 
3,747 
3,012 



Trans- 
porta- 
tion* 



176 

186 

324 
366 
48 
161 
609 

1,454 
711 
286 
755 
800 

813 
494 
992 
595 
778 

893 
724 
824 
824 
967 

718 
694 
567 
957 
982 

702 
1,494 
1,639 
1,564 
1,779 

1,253 

1,148 

860 

811 

1,005 

2,635 
3,626 
1,802 

388 

405 
502 
50? 

224 

677 
471 



Com- 
munica- 
tion 



902 
571 

399 
612 
760 
882 
720 

1,132 
1,419 
1,462 
1,424 
717 

1,050 
1,834 
1,303 
1,105 
2,189 

945 
2,003 
1,975 
1,775 
2,172 

5,291 
5,840 
4,836 
4,872 
3,930 

4,464 
3,562 
4,442 

1,419 

1,060 

643 

1, 320 

844 

384 

1,120 



> Prior to 1948, also includes extractive, radio broadcasting, airline companies, commercial, and miscellaneous company 
issues. 

3 Prior to 1948, also includes telephone, street railway, and bus company issues. 

> Prior to 1948. includes railroad issues only. 

Note.— Covers substantially all new issues of State, municipal, and corpcrate securities offered for cash sale in the United 
States in amounts over $100,000 and with terms to maturity of more than 1 year; excludes notes issued exclusively to 
commercial banks, intercorporate transactions, and issues to be sold over an extended period, such as employee-purchase 
plans. Closed-end investment company issues are included beginning 1973. 

Sources: Securities and Exchange Commission, "The Commercial and Financial Chronicle " and "The Bond Buyer." 



284 



Table B-88. — Common stock prices and yields, 1949-78 





Common stock prices 1 


Common stock yields 
(percent) • 


Year 

or 

quarter 


fi 


ew York Stock Exchange indexe 
(December 31, 1965=50)' 




Dow- 
Jones 
Industrial 
average^ 


Standard 
& Poor's 
composite 

index 
'1941-43 = 

10) « 


Dividend- 
price 
ratio 4 


Earnings- 


Com- 
posite 


Indus- 
trial 


Trans- 
portation 


Utility 


Finance 


price 
ratio ; 


1949 


9.02 

10.87 
13.08 
13.81 
13.67 
16.19 
21.54 
24.40 
23.67 
24.56 
30.73 

30.01 
35.37 
33.49 
37.51 
43.76 
47.39 
46.15 
50.77 
55.37 
54.67 

45.72 
54.22 
60.29 
57.42 
43.84 
45.73 
54.46 
53.69 
53.70 

56.28 
54.93 
54.67 
53.92 
53.96 
54.30 

54.94 
53.51 
52.66 
51.37 
51.87 
51.83 

49.89 
49.41 
49.50 
51.75 
54.49 
54.83 

54.61 
58.53 
58.58 
56.40 
52.74 
53.69 










179.48 

216. 31 
257. 64 
270. 76 
275. 97 
333.94 
442. 72 
493. 01 
475.71 
491.66 
632. 12 

618.04 
691. 55 
639. 76 
714.81 
834.05 
910. 88 
873. 60 
879. 12 
906. 00 
876. 72 

753. 19 
884. 76 
950. 71 
923. 88 
759. 37 
802. 49 
974. 92 
894. 63 
820. 23 

970. 62 
941. 77 
946. 11 
929. 10 
926. 31 
916.56 

908. 20 
872.26 
853. 30 
823.96 
828.51 
818. 80 

781.09 
763. 57 
756. 37 
794. 66 
838. 56 
840. 26 

831. 72 
887. 93 
878.64 
857. 69 
804. 29 
807.94 


15.23 

18.40 
22.34 
24.50 
24.73 
29.69 
40.49 
46.62 
44.38 
46.24 
57.38 

55.85 
66.27 
62.38 
69.87 
81.37 
88.17 
85.26 
91.93 
98.70 
97.84 

83.22 
98.29 
109. 20 
107.43 
82.85 
86.16 
102.01 
98.20 
96.02 

103. 81 
100. 96 
100.57 
99.05 
98.76 
99.29 

100. 18 
97.75 
96.23 
93.74 
94.28 
93.82 

90.25 
88.98 
88.82 
92.71 
97.41 
97.66 

97.19 
103.92 
103. 86 
100. 58 
94.71 
96.11 


6.59 

6.57 
6.13 
5.80 
5.80 
4.95 
4.08 
4.09 
4.35 
3.97 
3.23 

3.47 
2.98 
3.37 
3.17 
3.01 
3.00 
3.40 
3.20 
3.07 
3.24 

3.83 
3.14 
2.84 
3.06 
4.47 
4.31 
3.77 
4.62 
5.28 

3.99 
4.21 
4.37 
4.47 
4.57 
4.60 

4.59 
4.72 
4.82 
4.97 
5.02 
5.11 

5.32 

5.49 
5.62 
5.42 
5.20 
5.19 

5.25 
4.93 
4.97 
5.11 
5.45 
5.39 


15.48 


1950 










13.99 


1951 










11.82 


1952 










9.47 


1953 










10.26 


1954 










8.57 


1955 










7.95 


1956 










7.55 


1957 










7.89 


1958 










6.23 


1959 










5.78 


1960 










5.90 


1961 










4.62 


1962 










5.82 


1963 










5.50 


1964 










5.32 


1965 










5.59 


1966.... 


46.18 
51.97 
58.00 
57.44 

48.03 
57.92 
65.73 
63.08 
48.08 
50.52 
60.44 
57.86 
58.23 

61.26 
59.65 
59.56 
58.47 
58.13 
58.44 

58.90 
57.30 
56.41 
54.99 
55.62 
55.55 

53.45 
52.80 
52.77 
55.48 
59.14 
59.63 

59.35 
64.07 
64.23 
61.60 
57.50 
58.72 


50.26 
53.51 
50.58 
46.96 

32.14 
44.35 
50.17 
37.74 
31.89 
31.10 
39.57 
41.09 
43.50 

41.93 
40.59 
40.52 
41.51 
43.25 
43.29 

43.52 
41.04 
39.99 
38.33 
39.30 
39.75 

39.15 
38.90 
38.95 
41.19 
44.21 
44.19 

44.74 
49.45 
50.19 
46.70 
41.80 
42.49 


45.41 
45.43 
44.19 
42.80 

37.24 
39.53 
38.48 
37.69 
29.79 
31.50 
36.97 
40.92 
39.22 

41.13 

40.86 
40.18 
40.24 
41.14 
41.59 

42.44 
41.50 
40.93 
40.38 
40.33 
40.36 

39.09 
39.02 
39.26 
39.69 
39.47 
39.41 

39.28 
40.20 
39.82 
39.44 
37.88 
38.09 


44.45 
49.82 
65.85 
70.49 

60.00 
70.38 
78.35 
70.12 
49.67 
47.14 
52.94 
55.25 
56.65 

57.86 
55.65 
54.84 
54.30 
54.80 
55.29 

57.29 
56.52 
55.33 
53.24 
54.04 
53.85 

50.91 
50.60 
51.44 
55.04 
57.96 
58.31 

57.97 
63.28 
63.22 
60.42 
54.95 
55.68 


6.63 


1967 


5.73 


1968. . 


5.67 


1969 


6.08 


1970 


6.45 


1971 


5.41 


1972 


5.50 


1973 


7.12 


1974 


11.59 


1975 


9.15 


1976 


8.90 


1977 


10.79 


1978 




1977- jan 




Feb 




Mar. 

Apr. 

May 

June 

July 

Aug 

Sept 

Oct 


10.24 




10.37 




11.09 






Dec 

1978- Jan 


11.45 


Feb 




Mar 

Apr 

May 

June 

July 

Aug 

Sept 

Oct 


12.25 




11.79 




11.36 


Nov 













• Averages of daily closing prices, except New York Stock Exchange data through May 1964, are averages ot weekly closing 
prices. 

1 Includes all the stocks (more than 1,500) listed on the New York Stock Exchange. 
3 Includes 30 stocks. 

* Includes 500 stocks. 

8 Standard 8. Poor's series, based on 500 stocks in the composite index. 

8 Aggregate cash dividends (based on latest known annual rate) divided by aggregate market value based on Wednes- 
day closing prices. Monthly data are averages of weekly figures; annual data are averages of monthly Figures. 

' Ratio of quarterly earnings after taxes (seasonally adjusted annual rate) to price index for last day of quarter. 
Annual ratios are averages of quarterly ratios. 

Note.— All data relate to stocks listed on the New York Stock Exchange. 

Sources: New York Stock Exchange, Dow-Jones & Co., Inc., and Standard & Poor's Corporation. 

285 



Table B-89 — 


■Business formation and business failures, 1929—78 








Index 

of net 

business 

formation 

(1967 = 100) 


New 
business 
incorpo- 
rations 
(num- 
ber) 






Bus 


ness failures > 








Busi- 
ness 
failure 
rate' 


Number of failures 


Amount of current 

liabilities (millions 

of dollars) 


Year or month 


Total 


Liability size 
class 


Total 


Liability size 
class 




Under 
$100,000 


$100,000 
and 
over 


Under 
$100,000 


$100,000 
and 
over 


1929.... 






103.9 

100.3 

69.6 

63.0 

54.4 

44.6 

16.4 

6.5 

4.2 

5.2 

14.3 

20.4 

34.4 

34.3 
30.7 
28.7 
33.2 
42.0 
41.6 
48.0 
51.7 
55.9 
51.8 

57.0 
64.4 
60.8 
56.3 
53.2 
53.3 
51.6 
49.0 
38.6 
37.3 

43.8 
41.7 
38.3 
36.4 
38.4 
42.6 
34.8 
28.4 


22, 909 
19,859 

14, 768 
13,619 
11,848 

9,405 
3,221 
1,222 
809 
1,129 
3,474 
5,250 
9,246 

9,162 
8,058 
7,611 
8,862 
11,086 
10, 969 

12, 686 
13,739 
14, 964 
14,053 

15,445 
17, 075 

15, 782 
14,374 
13, 501 
13,514 

13, 061 
12, 364 

9,636 
9,154 

10,748 
10, 326 
9,566 
9,345 
9,915 
11,432 
9,628 
7,919 

664 
693 
858 
804 
724 
732 

513 
687 
560 
546 
621 
517 

504 
559 
666 
594 
583 
519 

459 
675 


22, 165 

18,880 

14, 541 

13, 400 

11,685 

9,282 

3,155 

1,176 

759 

1,003 

3,103 

4,853 

8,708 

8,746 
7,626 
7,081 
8,075 
10, 226 
10,113 
11,615 
12, 547 
13,499 
12,707 

13.650 
15.006 
13,772 
12, 192 
11,346 
11,340 
10, 833 
10, 144 
7,829 
7,192 

8,019 
7,611 
7,040 
6,627 
6,733 
7,504 
6,176 
4,861 

418 
425 
515 
520 
440 
455 

325 
401 
342 
353 
353 
314 

316 
319 
388 
335 
337 
301 

244 
347 


744 
979 
227 
219 
163 
123 
66 
46 
50 
126 
371 
397 
538 

416 

432 

530 

787 

860 

856 

1,071 

1,192 

1,465 

1,346 

1,795 
2,069 
2,010 
2,182 
2,155 
2,174 
2,228 
2,220 
1,807 
1,962 

2,729 
2.715 
2,526 
2,718 
3,182 
3,928 
3.452 
3,058 

246 
268 
343 
284 
284 
277 

188 
286 
218 
193 
268 
203 

188 
240 
278 
259 
246 
218 

215 

328 


483.3 

457.5 

182.5 

166.7 

136.1 

100.8 

45.3 

31.7 

30.2 

67.3 

204.6 

234.6 

308.1 

248.3 
259.5 
283.3 
394.2 
462.6 
449.4 
562.7 
615.3 
728.3 
692.8 

938.6 
1,090.1 
1,213.6 
1,352.6 
1,329.2 
1,321.7 
1,385.7 
1,265.2 

941.0 
1,142.1 

1,887.8 
1,916.9 

2, 000. 2 
2,298.6 
3,053.1 
4, 380. 2 
3,011.3 

3, 095. 3 

168.5 
194.2 
248.2 
207.3 
473.9 
305.9 

577.8 
338.3 
97.0 
115.7 
200.3 
168.3 

168.3 
205.0 
324.4 
203.0 
160.4 
178.8 

231.8 
206.4 


261.5 

215.5 

132.9 

119.9 

100.7 

80.3 

30.2 

14.5 

11.4 

15.7 

63.7 

93.9 

161.4 

151.2 
131.6 
131.9 
167.5 
211.4 
206.4 
239.8 
267.1 
297.6 
278.9 

327.2 
370.1 
346.5 
321.0 
313.6 
321.7 
321.5 
297.9 
241.1 
231.3 

269.3 
271.3 
258.8 
235.6 
256.9 
298.6 
257.8 
208.3 

17.7 
18.3 
21.7 
22.1 
18.4 
19.2 

14.2 
18.5 
14.0 
14.7 
15.4 
14.0 

14.3 
14.1 
18.2 
15.5 
14.7 
12.3 

10.6 
15.9 


221.8 


1933 3 . 






242.0 


1939 3 .. 






49.7 


1940 






46.8 


1941 . 






35.4 


1942 






20.5 


1943. .. 






15.1 


1944 






17.1 


1945 .. 






18.8 


1946 




132.916 
112,897 
96, 346 
85, 640 

93,092 
83, 778 
92, 946 
102, 706 
117,411 
139,915 
141, 163 
137,112 
150,781 
193, 067 

182,713 
181,535 
182, 057 
186,404 
197,724 
203, 897 
200, 010 
206, 569 
233,635 
274, 267 

264, 209 
287, 577 
316,601 
329, 358 
319, 149 
326, 345 
375,766 
436, 170 


51.6 


1947 




140.9 


1948 


112.6 
87.8 

93.1 
93.3 
98.2 
94.4 
91.3 
99.1 
95.2 
90.4 
89.5 
96.8 

92.4 
88.3 
90.7 
93.3 
97.2 
98.6 
98.2 
100.0 
109.8 
116.2 

108.0 
111.0 
117.9 
117.9 
112.4 
108.9 
117.6 
127.4 


140.7 


1949 


146.7 


1950 


97.1 


1951 


128.0 


1952 


151.4 


1953 


226.6 


1954 


251.2 


1955 


243.0 


1956 


322.9 


1957 


348.2 


1958 


430.7 


1959 


413.9 


1960 


611.4 


1961... 


720.0 


1962 


867.1 


1963 


1,031.6 


1964 


1,015.6 


1965 


1,000.0 


1966 .. 


1. 064. 1 


1967 


967.3 


1968 


699.9 


1969 


910.8 


1970 


1,618.4 


1971 


1,645.6 


1972 


1,741.5 


1973 


2,063.0 


1974 


2,796.3 


1975 


4,081.6 


1976 


2, 753. 4 


1977... 


2, 887. 








Seaso 


nally adjust 


3d 




1977: Jan 


123.3 
123.0 
124.3 
122.4 
123.2 
125.8 

126.6 
130.6 
129.6 
132.0 
133.5 
134.8 

135.1 
135.0 
131.8 
131.9 
132.2 
134.2 

134.7 
133.8 
133.6 
133.3 


34, 519 
33, 173 
35,300 
33, 394 

34, 442 

37, 229 

35, 749 
39, 525 
37,812 

38, 943 

38, 344 

39, 674 

36, 547 
39, 253 
37, 602 
38, 498 

38, 320 
39,7% 

39, 403 
42, 605 
41,827 
41,945 


28.4 
29.6 
32.3 
31.7 
30.2 
30.8 

24.1 
29.7 
27.0 
24.2 
27.0 
24.7 

21.6 
24.0 
24.6 
24.1 
23.4 
21.9 

22.0 
29.8 


ISO. 9 


Feb 


175.9 


Mar 


226.5 


Apr 


185.2 


May 


455.4 


June 


286.7 


July 


563.6 


Aug 


319.7 


Sept... 


83.0 


Oct 


100.9 


Nov 


184.8 


Dec 


154.3 


1978:Jan 


154.0 


Feb 


190.9 


Mar 


306.2 


Apr 


187.5 


May. 


145.7 


June 


166.5 


July 


221.2 


Aug 


190.5 


Sept 




Oct 

































< Commercial and industrial failures only. Excludes failures of banks and railroads and, beginning 1933, of real estate, 
insurance, holding, and financial companies, steamship lines, travel agencies, etc. 
» Failure rate per 10,000 1 sted enterprises. 
' Series revised; not strictly comparable with earlier data. 
Sources: Department of Commerce (Bureau of Economic Analysis) and Dun & Bradstreet, Inc. 



286 



AGRICULTURE 

Table B-90. — Income of farm people and farmers, 1929-78 
[Quarterly data at seasonally adjusted annual rates] 





Personal income 
received by total 
farm population 


Income received from farming 3 


Year or 


Gross income 

before inventory 

adjustment 


Produc- 
tion ex- 
penses 


Net to farm 
operators 


Net inco 
farm 
inver 
adjust 


me per 

after 

tory 


quarter 


From 
all 

sources 


From 

farm 

sources ' 


From 
non- 
farm 
sources 2 


Total * 


Cash 
receipts 

from 
market- 
ings 


Before 
inven- 
tory 
adjust- 
ment 


After 
inven- 
tory 
adjust- 
ment 5 






Current 
dollars 


1967 
dollars ' 




Billions of dollars 


Dollars 


1929 








13.9 
7.1 
10.6 

11.1 
13.9 
18.8 
23.4 
24.4 
25.8 
29.5 
34.1 
34.7 
31.6 

32.3 
37.1 
36.8 
35.1 
33.7 
33.3 
34.4 
34.2 
38.1 
37.9 

38.5 
40.2 
41.7 
42.7 
43.1 
45.5 
50.6 
49.9 
51.7 
56.3 

58.6 
60.6 
70.1 
95.5 
100.0 
96.9 
104.1 
108.1 

102.5 
108.4 
102.8 
102.6 

108.1 
106.7 
102.7 
114.8 

115.8 
122.5 
122.5 


11.3 
5.3 

7.9 

8.4 
11.1 
15.6 
19.6 
20.5 
21.7 
24.8 
29.6 
30.2 
27.8 

28.5 
32.9 
32.5 
31.0 
29.8 
29.5 
30.4 
29.7 
33.5 
33.6 

34.2 
35.2 
36.5 
37.5 
37.3 
39.4 
43.4 
42.8 
44.2 
48.2 

50.5 
52.9 
61.2 
87.1 
92.4 
88.2 
94.5 
96.1 

93.3 
98.9 
93.2 
92.6 

97.6 
95.7 
91.3 
99.6 

102.2 
109.0 
109.5 


7.7 
4.4 
6.3 

6.9 
7.8 
10.0 
11.6 
12.3 
13.1 
14.5 
17.0 
18.8 
18.0 

19.5 
22.3 
22.8 
21.5 
21.8 
22.2 
22.7 
23.7 
25.8 
27.2 

27.4 
28.6 
30.3 
31.6 
31.8 
33.7 
36.5 
38.2 
39.5 
42.1 

44.4 
47.4 
52.3 
65.6 
72.2 
75.9 
83.0 
88.0 

79.5 
85.0 
84.5 
82.9 

87.5 
87.0 
86.0 
91.4 

93.5 
96.0 
96.0 


6.5 

2.7 
4.3 

4.2 
6.1 
8.8 
11.8 
12.1 
12.8 
15.0 
17.1 
15.9 
13.6 

12.8 
14.8 
14.0 
13.6 
11.9 
11.1 
11.7 
10.5 
12.3 
10.7 

11.1 
11.6 
11.4 
11.1 
11.3 
11.9 
14.0 
11.7 
12.2 
14.2 

14.1 
13.2 
17.8 
29.9 
27.7 
21.1 
21.1 
20.1 

23.0 
23.4 
18.3 
19.7 

20.6 
19.7 
16.7 
23.4 

22.3 
26.5 
26.5 


6.2 
2.6 
4.4 

4.5 
6.5 
9.9 
11.7 
11.7 
12.3 
15.1 
15.4 
17.7 
12.8 

13.6 
15.9 
15.0 
13.0 
12.4 
11.3 
11.3 
11.1 
13.2 
10.7 

11.5 

12.0 
12.1 
11.8 
10.5 
12.9 
14.0 
12.3 
12.3 
14.3 

14.2 
14.6 
18.7 
33.3 
26.1 
24.5 
18.8 
20.5 

21.5 
19.9 
17.1 
16.5 

19.6 
20.2 
16.8 
25.5 

22.3 
24.5 
25.5 


945 
379 
685 

706 
1,031 
1,588 
1,927 
1,950 
2,063 
2,543 
2,615 
3,044 
2,233 

2,417 
2,936 
2,878 
2,604 
2,579 
2,429 
2,493 
2,536 
3,111 
2,615 

2,907 
3,126 
3,267 
3,295 
3,035 
3,843 
4,286 
3,903 
4,013 
4,764 

4,799 
5,042 
6,526 
11,813 
9,349 
8,845 
6,848 
7,592 

7,850 
7,270 
6,250 
6,030 

7,240 
7,460 
6,210 
9,420 

8,320 
9,140 
9,510 




1933 










1939 


7.4 

7.6 
10.1 
14.1 
16.5 
16.6 
17.2 
20.0 
21.1 
23.8 
19.5 

20.3 
22.7 
22.0 
19.7 
18.3 
17.5 
17.6 
17.5 
19.2 
17.5 

18.4 

19.0 
19.7 
20.0 
19.8 
22.6 
23.8 
22.9 
24.1 
26.9 

27.5 
28.8 
34.6 
48.9 
45.2 
44.5 
41.2 
43.0 


4.8 

4.8 
6.8 
10.1 
12.1 
12.2 
12.8 
15.5 
15.8 
18.0 
13.3 

14.1 

16.1 
15.3 
13.3 
12.4 
11.3 
11.1 
10.8 
12.5 
10.4 

11.1 
11.4 
11.4 
11.0 
10.0 
12.0 
12.6 
11.1 
11.3 
12.9 

13.0 
13.5 
16.9 
29.2 
23.4 
21.9 
16.9 
18.3 


2.6 

2.8 
3.3 
3.9 
4.4 
4.4 
4.4 
4.6 
5.3 
5.8 
6.2 

6.3 
6.5 
6.7 
6.4 
5.9 
6.2 
6.6 
6.6 
6.7 
7.1 

7.2 
7.6 
8.3 
9.0 
9.7 
10.6 
11.2 
11.7 
12.8 
13.9 

14.5 
15.3 
17.8 
19.7 
21.8 
22.7 
24.4 
24.7 


1,646 


1940 


1,681 


1941 


2,338 


1942 


3,254 


1943 


3,720 


1944 


3,700 


1945 


3,827 


1946 


4,347 


1947 


3,909 


1948 


4,222 


1949 


3,127 


1950 


3,352 


1951 


3,774 


1952 


3,620 


1953 


3,251 


1954 


3,204 


1955 


3,029 


1956... 


3,063 


1957 


3,008 


1958 


3,592 


1959... 


2,995 


1960 


3,277 


1961... 


3,489 


1962 


3,606 


1963 


3,593 


1964 


3,267 


1965 


4,067 


1966 


4,409 


1967 


3,903 


1968... 


3,851 


1969 


4,339 


1970 


4,126 


1971 


4,157 


1972... 


5,208 


1973... 


8,875 


1974 


6,330 


1975 


5,487 


1976 


4,016 


1977 . 


4,183 


1976: 1 


4,690 


II 








4,290 


III 








3,630 


IV 








3,470 


1977: 1 








4,090 


II 








4,130 


Ill 








3,390 


IV 








5,080 


1978: 1 








4,410 


II 








4,730 


HI 








4,810 













i Net income to farm operators after inventory adjustment, less net income of nonresident operators, plus wages and 
salaries and other labor income of farm resident workers, less contributions of farm resident operators and workers to 
social insurance. 

2 Estimated income of farm residents from nonfarm sources; based on survey benchmarks with extrapolations to current 
year. 

3 Includes government payments. 

« Also includes government payments and nonmoney income and other farm income furnished by farms, not shown 
separately. 
{ Includes net value of physical change in inventory of crops and livestock valued at average prices for the year. 
8 The 1969 farm definition is used. 
7 Income in current dollars divided by the consumer price index (Department of Labor). 



Source: Department of Agriculture, except as noted. 



287 



Table B-91.— Farm production indexes, 1929-78 
11967 = 100] 





Farm 










Crops* 








Livestock and products' 






























Year 


out- 
put* 


Total » 


Feed 
grains 


Hay 
and 
for- 
age 


Food 
grains 


Vege- 
tables 


Fruits 
and 
nuts 


Cot- 
ton 


To- 
bacco 


Oil 
crops 


Total « 


Meat 
ani- 
mals 


Dairy 
prod- 
ucts 


Poul- 
try 
and 

eggs 


1929.... 


53 


62 


48 


71 


52 


64 


74 


205 


76 


11 


53 


52 


75 


33 


1933_.. 


51 


55 


44 


62 


36 


62 


75 


180 


69 


8 


57 


58 


79 


32 


1939.... 


58 


64 


51 


68 


48 


69 


95 


163 


96 


25 


59 


59 


81 


35 


1940... 


60 


67 


52 


76 


52 


72 


91 


173 


74- 


29 


60 


60 


83 


36 


1941... 


62 


68 


56 


75 


60 


73 


97 


148 


64 


29 


64 


63 


87 


39 


1942... 


70 


76 


64 


82 


63 


78 


96 


177 


72 


40 


71 


72 


91 


45 


1943... 


69 


71 


59 


80 


54 


84 


83 


158 


71 


41 


77 


81 


90 


52 


1944... 


71 


75 


62 


79 


67 


80 


96 


169 


99 


36 


73 


73 


91 


52 


1945... 


70 


73 


60 


81 


70 


82 


87 


125 


101 


36 


73 


69 


94 


54 


1946... 


71 


77 


65 


77 


72 


91 


104 


120 


118 


34 


71 


68 


93 


51 


1947... 


69 


73 


50 


74 


85 


80 


99 


164 


107 


39 


70 


67 


92 


50 


1948... 


76 


83 


72 


74 


81 


84 


91 


206 


101 


47 


68 


66 


89 


49 


1949... 


74 


79 


63 


73 


70 


82 


95 


221 


100 


45 


72 


69 


91 


54 


1950... 


74 


76 


64 


78 


65 


83 


96 


138 


103 


46 


75 


73 


92 


57 


1951... 


76 


78 


59 


81 


64 


78 


98 


209 


119 


47 


78 


79 


90 


59 


1952... 


79 


81 


63 


79 


83 


79 


95 


209 


115 


46 


78 


79 


91 


60 


1953... 


79 


81 


61 


81 


76 


82 


96 


227 


105 


47 


79 


78 


95 


61 


1954... 


80 


79 


64 


81 


67 


81 


97 


188 


114 


49 


82 


81 


97 


64 


1955... 


82 


82 


68 


86 


63 


84 


93 


203 


112 


53 


84 


85 


98 


63 


1956... 


82 


82 


68 


82 


66 


89 


97 


184 


111 


60 


84 


83 


100 


69 


1957... 


81 


80 


74 


89 


62 


86 


88 


151 


85 


58 


83 


80 


100 


70 


1958... 


87 


89 


80 


89 


91 


89 


96 


157 


88 


69 


84 


81 


99 


74 


1959... 


88 


89 


84 


85 


73 


87 


98 


200 


91 


64 


88 


87 


98 


76 


1960... 


91 


93 


87 


90 


87 


89 


94 


196 


99 


68 


87 


85 


100 


76 


1961... 


91 


91 


78 


90 


80 


94 


98 


196 


105 


77 


91 


88 


102 


82 


1962... 


92 


92 


79 


93 


74 


92 


98 


205 


118 


78 


92 


90 


103 


82 


1963... 


96 


96 


86 


93 


77 


92 


96 


211 


119 


81 


95 


95 


102 


84 


1964... 


95 


93 


75 


94 


86 


89 


97 


209 


113 


81 


97 


97 


104 


87 


1965... 


98 


99 


88 


98 


88 


96 


100 


205 


94 


95 


95 


92 


104 


90 


1966... 


95 


95 


89 


97 


88 


97 


98 


130 


96 


97 


97 


96 


101 


96 


1967... 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


100 


1968... 


102 


103 


95 


99 


106 


104 


98 


148 


87 


114 


100 


101 


99 


98 


1969... 


102 


104 


99 


100 


98 


101 


116 


137 


91 


116 


101 


102 


98 


100 


1970... 


101 


100 


89 


100 


91 


98 


110 


139 


97 


117 


105 


108 


99 


105 


1971... 


110 


112 


ll6 


105 


107 


98 


118 


145 


86 


121 


106 


109 


101 


106 


1972... 


no 


113 


112 


104 


102 


99 


106 


187 


88 


131 


107 


109 


102 


109 


1973... 


112 


119 


115 


109 


114 


100 


126 


175 


88 


155 


105 


108 


98 


106 


1974... 


106 


110 


93 


104 


120 


102 


128 


158 


101 


127 


106 


110 


99 


106 


1975... 


114 


121 


114 


108 


142 


101 


137 


112 


110 


153 


101 


102 


98 


103 


1976... 


117 


121 


120 


102 


141 


101 


136 


142 


108 


132 


105 


105 


103 


110 


1977... 


121 


130 


126 


109 


131 


102 


139 


193 


97 


175 


106 


105 


105 


HI 


1978 ■>.. 


122 


131 


135 


115 


124 


107 


133 


146 


102 


180 


108 


107 


105 


117 



1 Farm output measures the annual volume of net farm production available for eventual human use through sales from 
farms or consumption in farm households. 

1 Gross production. 

3 Includes sugar crops, hay seeds, pasture seeds, cover-crop seeds, and some miscellaneous crop production, not included 
in groups shown. 

♦ Includes clipped wool, mohair, and beginning 1950 honey and beeswax, not included in groups shown. 

Source: Department of Agriculture. 



288 



Table B-92. — Farm population, employment, and productivity, 1929-78 



Year 



1929. 

1933. 

1939. 

1940. 
1941. 
1942. 
1943. 
1944. 

1945. 
1946. 
1947. 
1948. 
1949. 

1950. 
1951. 
1952. 
1953. 



1960. 
1961. 
1962. 
1963. 
1964. 

1965. 
1966. 
1967. 
1968. 
1969. 

1970. 
1971. 
1972. 
1973. 
1974. 



1975 .., 

1976 .. 
1977.. 
1978 v . 



1954 19,019 



1955. 
1956. 
1957. 
1958. 
1959. 



Farm po 


pulation 
1 l)' 


Farrr 


employment 


(Apr 


(thousands, 


' 


Num- 
ber 
(thou- 
sands) 


As per- 
cent of 
total 
popu- 
lation ^ 


Total 


Family 
workers 


Hired 
workers 


30, 580 


25.1 


12, 763 


9,360 


3,403 


32, 393 


25.8 


12, 739 


9,874 


2,865 


30, 840 


23.5 


11,338 


8,611 


2,727 


30, 547 


23.1 


10,979 


8,300 


2,679 


30.118 


22.6 


10, 669 


8,017 


2,652 


28,914 


21.4 


10, 504 


7,949 


2,555 


26, 186 


19.2 


10, 446 


8,010 


2,436 


24, 815 


17.9 


10,219 


7,988 


2,231 


24, 420 


17.5 


10, 000 


7,881 


'2,119 


25, 403 


18.0 


10, 295 


8,106 


2,189 


25, 829 


17.9 


10, 382 


8,115 


2,267 


24, 383 


16.6 


10, 363 


8,026 


2,337 


24, 194 


16.2 


9,964 


7,712 


2,252 


23, 048 


15.2 


9,926 


7,597 


2,329 


21, 890 


14.2 


9,546 


7,310 


2,236 


21,748 


13.9 


9,149 


7,005 


2,144 


19, 874 


12.5 


8,864 


6,775 


2,089 


19, 019 


11.7 


8,651 


6,570 


2,081 


19,078 


11.5 


8,381 


6,345 


2,036 


18,712 


11.1 


7,852 


5,900 


1,952 


17,656 


10.3 


7,600 


5,660 


1,940 


17,128 


9.8 


7,503 


5,521 


1,982 


16, 592 


9.4 


7,342 


5,390 


1,952 


15,635 


8.7 


7,057 


5.172 


1,885 


14,803 


8.1 


6,919 


5,029 


1,890 


14,313 


7.7 


6,700 


4,873 


1,827 


13,367 


7.1 


6,518 


4,738 


1,780 


12,954 


6.8 


6,110 


4,506 


1,604 


12, 363 


6.4 


5,610 


4,128 


1,482 


11, 595 


5.9 


5,214 


3,854 


1,360 


10,875 


5.5 


4,903 


3,650 


1,253 


10, 454 


5.2 


4,749 


3,535 


1,213 


10, 307 


5.K 


4,596 


3,419 


1,176 


9,712 


4.7 


4,523 


3,348 


1,175 


9,425 


4.6 


4,436 


3,275 


1,161 


9,610 


4.6 


4,373 


3,228 


1,146 


9,472 


4.5 


4,337 


3,169 


1,168 


9,264 


4.4 


4,389 


3,075 


1,314 


8,864 


4.2 


4,342 


3,026 


1,317 


8,253 


3.8 


4,374 


2,997 


1,377 


7,806 


3.6 


4,152 


2,856 


1,296 


8,000 


3.7 


3,922 


2,672 


1,250 



Per 
unit of 
total 
input 



Farm output 



Per hour of farm work 



Total 



Crops 



Live- 
stock 
and 
products 



Index, 1967 = 100 



52 


16 


16 


26 


53 


16 


15 


25 


59 


19 


20 


27 


60 


20 


21 


27 


62 


21 


23 


28 


68 


24 


25 


30 


66 


24 


24 


31 


67 


24 


25 


30 


68 


26 


27 


31 


71 


27 


29 


32 


68 


28 


29 


33 


74 


31 


33 


34 


71 


32 


33 


35 


71 


34 


36 


37 


71 


35 


35 


39 


74 


38 


39 


40 


75 


39 


40 


41 


76 


42 


42 


43 


78 


44 


45 


46 


80 


47 


48 


48 


80 


51 


53 


50 


87 


57 


61 


54 


87 


59 


61 


58 


90 


65 


66 


62 


91 


67 


68 


66 


9? 


71 


72 


71 


96 


77 


77 


77 


95 


81 


79 


82 


100 


89 


90 


86 


97 


92 


94 


93 


100 


100 


100 


100 


102 


106 


106 


105 


103 


110 


108 


112 


102 


115 


111 


121 


no 


128 


126 


128 


110 


136 


135 


137 


HI 


130 


138 


144 


106 


136 


128 


156 


115 


152 


142 


160 


115 


162 


146 


178 


118 


173 


157 


189 


120 


174 


160 


193 



1 Farm population as defined by Department of Agriculture and Department of Commerce, i.e., civilian population 
living on farms, regardless of occupation. 

J Total population of United States as of July 1, including Armed Forces overseas. 

3 Includes persons doing farmwork on all farms. These data, published by the Department of Agriculture, Statistical 
Reporting Service, differ from those on agricultural employment by the Department of Labor (see Table B -29) because of 
differences in the method of approach, in concepts of employment, and in time of month for which the data are collected. 
See monthly report on "Farm Labor." 

* Computed from variable weights for individual crops produced each year. 

Sources: Department of Agriculture and Department of Commerce (Bureau of the Census). 



289 



Table B-93. — Indexes of prices received and prices paid by farmers and selected farm resource 

prices, 1929-78 

[1967 = 100, except as noted] 





Prices received by farmers 


Prices paid by farmers 


Selected resource prices 


Year or month 


All 

farm 

products 


Crops 


Live- 
stock 
and 
iroducts 


All 
items, 
interest, 
taxes, 
and 
wage 
rates 


Family 
living 
items 


Produc- 
tion 
items 


Tractors 
and 
self- 
pro- 
pelled 
ma- 
chinery 


Fertil- 
izer 


Average 
hourly 

wage 

tate, 
all 

hired 

farm 
workers 1 


Average 
farm 
real 
estate 
value 
per 
acre 2 


1929 


59 
28 
38 

40 
49 
64 
77 
79 
83 
94 
110 
115 
100 

103 
121 
115 
102 
98 
93 
92 
94 
100 
96 

95 
96 
98 
97 
95 
98 
106 
100 
102 
107 

no 

113 
125 
179 
192 
185 
186 
183 
209 

183 
186 
189 
192 
192 
184 

180 
174 
174 
177 
178 
181 

186 
193 
200 
208 
215 
217 

215 
210 
215 
217 
215 
221 


60 
31 
36 

40 
48 
64 
83 
88 
90 
102 
117 
113 
100 

103 
118 
119 
107 
108 
103 
104 
100 
99 
98 

99 
101 
103 
107 
106 
103 
106 
100 
100 

97 

100 
108 
114 
175 
224 
201 
197 
192 
203 

198 
201 
210 
214 
211 
196 

181 
172 
170 
178 
184 
183 

188 
190 
198 
208 
212 
216 

212 

202 
203 
200 
200 
203 


58 
25 
39 

40 
50 
62 
72 
71 
77 
88 
105 
115 
99 

102 
122 
HI 
97 
90 
85 
82 
89 
99 
93 

92 
91 
93 
89 
86 
94 
106 
100 
104 
117 

118 
118 
136 
183 
165 
172 
177 
175 
216 

170 
174 
172 
173 
177 
173 

179 
177 
177 
176 
174 
180 

185 
196 
204 
209 
217 
219 

217 
217 
226 
232 
228 
237 


47 
32 
36 

36 
39 
44 
50 
53 
56 
61 
70 
76 
73 

75 
82 
84 
81 
81 
81 
81 
84 
86 
87 

88 

88 
90 
91 
92 
94 
99 
100 
103 
108 

112 

118 
125 
144 
164 
180 
191 
202 
219 

198 
200 
202 
204 
204 
204 

203 
201 
201 
201 
202 
203 

209 
211 
214 
216 
219 
220 

220 
220 
223 
224 
224 
226 


48 
34 
37 

38 
40 
46 
52 
54 
57 
63 
74 
78 
75 

76 
83 
84 
84 
84 
84 
85 
88 
89 
89 

90 
90 
91 
92 
93 
95 
98 
100 
104 
109 

114 
118 
123 
133 
151 
166 
176 

(») 

(?) 

(') 
(') 
( 3 ) 
(') 
(') 
(') 

(') 
(') 

In 
( 3 ) 
( 3 ) 

(?) 
( 3 ) 
< 3 > 
( 3 ) 
c) 
( 3 > 

(?) 
< 3 ) 
( 3 ) 
( 3 ) 
( 3 ) 
( 3 ) 


51 
34 
42 

43 
45 
52 
57 
60 
61 
67 
78 
87 
83 

86 
95 
95 
89 
89 
87 
87 
90 
92 
93 

92 
93 
94 
95 
94 
96 
100 
100 
100 
104 

108 
113 
121 
146 
166 
182 
193 
200 
216 

196 
199 
201 
204 
205 
203 

201 
198 
197 
198 
199 
199 

203 
206 
211 
214 
217 
218 

218 
217 
220 
222 
223 
225 








27 


1933 








16 


1939 








19 


1940 








19 


1941 








19 


1942 








21 


1943 








23 


1944.. 








26 


1945 








29 


1946 








32 


1947... 








36 


1948 






JO. 73 
.68 

.69 
.77 
.81 
.82 
.81 
.82 
.86 
.88 
.92 
.95 

.97 
.99 
1.01 
1.05 
1.08 
1.14 
1.23 
1.33 
1.44 
1.55 

1.64 
1.73 
1.84 
2.00 
2.25 
2.43 
2.66 
2.87 

2.96 


39 


1949 






41 


1950 






40 


1951 






46 


1952 






51 


1953 






52 


1954 






51 


1955 






53 


1956 






55 


1957 






58 


1958 






61 


1959 






66 


1960 






68 


1961 






69 


1962 






73 


1963 






77 


1964 






82 


1965 


92 

96 
100 
104 
HI 

116 
122 
128 
137 
161 
195 
217 
238 
259 

224 
224 
233 
233 
233 
241 

241 
241 
245 
245 
245 
245 

245 

245 
251 
251 
251 
260 

260 
260 
272 
272 
272 
272 


103 
102 
100 
94 
87 

88 

91 
94 
102 
167 
217 
185 
181 
180 

177 
177 
181 
181 
183 
183 

183 
183 
183 
182 
182 
179 

179 
179 
181 
181 
181 
181 

181 
181 
181 
179 
179 
179 


86 


1966 


93 


1967 


100 


1968 


107 


1969 


113 


1970 


117 


1971 


122 


1972 


132 


1973 


150 


1974 


187 


1975 


213 


1976 


242 


1977.. 


283 


1978 


308 


1977: Jan 




Feb 


283 


Mar 






2.82 




May 










July 


2.77 








Sept 






Oct 


2.99 




Nov 


296 


Dec 




1978: Jan 


3.18 




Feb .. 


308 


Mar 






3.09 




May 










July 


2.93 














Oct 


3.18 




Nov. 


332 













1 Without room or board. ,„,. 

J Average for 48 States. Annual data are for March 1 of each year through 1975 and for February 1 beginning 1976. 
Monthly data are for first of month. 
3 Series discontinued. Consumer price index (Department of Labor) substituted in calculating total prices paid. 



Source: Department of Agriculture. 



290 



Table B-94. — Selected measures of farm resources and inputs, 1929-78 



Year 



1929. 

1933. 

1939. 

1940. 
1941. 
1942. 
1943. 
1944. 

1945. 
1946. 
1947. 
1948. 
1949. 

1950. 
1951.. 
1952.. 
1953.. 
1954.. 

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

I960.. 
1961.. 
1962.. 
1963.. 
1964.. 

1965.. 
1966.. 
1967.. 
1968.. 
1969.. 

1970.. 
1971.. 
1972.. 
1973.. 
1974.. 

1975.. 
1976.. 
1977... 
1978 v 



Crops 
har- 
vested 
(mil- 
lions 
of 
acres) ■ 



365 

340 

331 

341 
344 
348 
357 
362 

354 
352 
355 
356 
360 

345 
344 
349 
348 
346 

340 
324 
324 
324 
324 

324 
302 
295 
298 
298 

298 
294 
306 
300 
290 

293 
305 
294 
321 
328 

336 
337 
343 
336 



Total 
hours 

of 
farm 
work 
(bil- 
lions) 



Index numbers of inputs (1967 = 100) 



Total 



Farm 
labor 



23.2 

22.6 

20.7 

20.5 
20.0 
20.6 
20.3 
20.2 

18.8 
18.1 
17.2 
16.8 
16.2 

15.1 
15.2 
14.5 
14.0 
13.3 

12.8 
12.0 
11.1 
10.5 
10.3 

9.8 
9.4 
9.0 
8.7 
8.2 

7.3 
6.9 
6.7 
6.4 
6.2 

5.9 
5.7 
5.4 
5.3 
5.2 

5.0 
4.8 
4.7 
4.7 



102 



98 

100 
100 
103 
104 
105 

103 
101 
101 
103 
105 

104 
107 
107 
106 
105 

105 
103 
101 
100 
102 

101 
100 
100 
100 
100 

98 
98 
100 
100 
99 

100 
100 
100 
101 
100 

100 
102 
103 
102 



Farm 

real 

estate 



329 

321 

294 

293 
288 
296 
292 
289 

271 
260 
246 
240 
231 

217 
218 
208 
200 
192 

185 
174 
162 
156 
151 

145 
139 
133 
129 
122 

110 
103 
100 
97 
93 

89 
86 
82 
80 
78 

76 
73 
71 
71 



103 

97 

102 

103 
102 
100 
98 
98 

98 
102 
103 
103 
104 

105 
105 
105 
105 
105 

105 
102 
102 
100 
101 

100 
100 
100 
100 
100 

99 
99 
100 
99 
98 

101 
99 
98 
97 

95 

96 
97 
97 
97 



Me- 
chani- 
cal 
power 
and 
ma- 
chinery 



40 

42 
44 
51 
55 

57 

58 
57 
64 
72 
80 

84 
90 
94 
96 
96 

97 
98 
97 
97 
98 

97 
94 
94 
93 

93 

94 

96 
100 
101 
101 

100 
102 
101 
105 
109 

113 
115 
116 
117 



Agri- 
cultural 
chemi- 
cals 2 



13 
14 
15 
17 
20 

20 
21 
23 
25 
27 

29 
32 
35 
36 
37 

39 
41 
41 
43 
49 

49 
53 
58 
65 
71 

75 
85 
100 
105 
HI 

115 
124 
131 

136 
140 

127 
145 
151 

150 



Feed, 
seed, 
and 
live- 
stock 
pur- 
chases 3 



42 
45 
48 
52 
52 

54 
53 
55 
56 
61 

63 
67 
69 
69 
71 

72 
75 
74 
79 
84 

84 
88 
90 
90 
92 

93 
97 

100 
97 

101 

104 
111 
113 
116 
107 

101 
110 
110 
HI 



Taxes 

and 

interest 



73 

75 

72 

72 
73 
73 
77 
79 

80 
81 
81 
79 
82 

82 
82 
85 
86 
85 

88 
87 
86 
87 
93 

94 
95 
96 
98 
99 

100 
100 
100 
101 
100 

100 
99 
100 
100 
101 

101 
101 
99 
100 



Miscel- 
laneous 



81 
83 
87 
91 

87 
93 
93 
92 
90 

94 
90 
94 
98 
103 

105 
105 
108 
109 
113 

109 
104 
100 
106 
105 

109 
108 
115 
111 
110 

104 
115 
126 
110 



1 Acreage harvested plus acreages in fruits, tree nuts, and farm gardens. 

i Fertilizer, lime, and pesticides. 

' Nonfarm constant dollar value of feed, seed, and livestock purchases. 

Source: Department of Agriculture. 



291 



Table E-95. — Balance sheet of the farming sector, 1929-79 

[Billions of dollars! 





Assets 


Claims 




Total 


Real 
estate 


Live- 
stock i 


Other physical assets 


Financial assets 


Total 


Real 
estate 
debt 


Other 
debt 




Beginning of 
year 


Ma- 
chin- 
ery 
and 
motor 
vehi- 
cles 


Crops? 


House- 
hold 

equip- 
ment 
and 

furnish- 
ings 


De- 
posits 
and 
cur- 
rency 


U.S. 
savings 
bonds 


Invest- 
ments 
in co- 
opera- 
tives 


Pro- 
prie- 
tors' 
equi- 
ties 


1929 




48.0 
30.8 
34.1 

33.6 

34.4 
37.5 
41.6 
48.2 

53.9 
61.0 
68.5 
73.7 
76.6 

77.6 
89.5 
98.4 
100.1 
98.7 

102.2 
107.5 
115.7 
121.8 
131.1 

137.2 
138.5 
144.5 
150.2 
158.6 

167.5 
179.2 
189.1 
199.7 
209.2 

215.8 
223.2 
239.6 
267.3 
327.7 

368.5 
416.9 
483.8 
525.8 

588.9 


6.6 

3.0 

5.1 

5.1 
5.3 
7.1 
9.6 
9.7 

9.0 
9.7 
11.9 
13.2 
14.4 

12.9 
17.1 
19.5 
14.8 
11.8 

11.2 
10.6 
11.0 
13.9 
17.7 

15.3 
15.6 
16.4 
17.3 
15.9 

14.5 

17.6 
19.0 
18.9 
20.2 

23.5 
23.7 
27.3 
34.1 
42.4 

24.6 
29.5 
29.1 
32.0 


3.2 

2.5 

3.2 

3.1 
3.3 
4.0 
4.9 

5.4 

6.5 
5.4 
5.3 
7.4 
10.1 

12.2 
14.1 
16.7 
17.4 
18.4 

18.6 
19.3 
20.2 
20.1 
21.8 

22.7 
22.2 
22.5 
23.5 
23.9 

24.8 
26.0 
27.4 
29.8 
31.3 

32.3 

34.4 
36.6 
39.3 
44.2 

55.7 
64.7 
71.0 
75.2 














9.8 

8.5 

6.8 

6.6 
6.5 
6.4 
5.9 
5.4 

4.9 
4.7 
4.9 
5.1 
5.3 

5.6 
6.1 
6.7 
7.2 
7.7 

8.2 
9.0 
9.8 
10.4 
11.1 

12.0 
12.8 
13.8 
15.1 
16.8 

18.9 
21.2 
23.1 
25.1 
27.4 

29.2 
30.3 
32.2 
35.7 
41.3 

46.3 
51.1 
56.6 
63.3 

72.2 






1933. . 


















1939 




















1940 


53.0 
54.8 
62.9 
73.6 
84.0 

93.8 
102.9 
115.9 
127.4 
134.6 

134.5 
1M.3 
1/0.1 
167.6 
164.6 

168.8 
173.6 
182.8 
191.3 
208.4 

210.2 
210.8 
219.3 
227.7 
235.8 

243.8 
260.8 
274.2 
288.0 
302.8 

314.9 
326.0 
351.8 
394.8 
478.5 

517.5 
579.9 
654.9 
708.3 

790.1 


2.7 
3.0 
3.9 
5.1 

6.1 

6.7 
6.3 
7.1 
9.0 
8.5 

7.6 
7.9 
8.8 
9.0 
9.2 

9.6 
8.3 
8.3 
7.6 
9.3 

7.7 
8.0 
8.8 
9.3 
9.8 

9.2 
9.7 

10.0 
9.6 

10.6 

10.9 
10.7 
11.8 
14.5 
22.1 

23.3 
21.3 
22.0 
24.6 


4.2 
4.1 
4.8 
4.8 
4.7 

5.2 
5.5 
7.2 
8.1 
8.9 

8.4 
9.6 
10.1 
9.6 
9.5 

9.7 
10.0 
9.6 
9.6 
9.4 

9.2 
8.7 
8.9 
8.8 
8.8 

8.4 
8.4 
8.3 
8.8 
9.4 

9.6 
10.0 
10.8 
11.9 
12.3 

14.0 
14.2 
14.4 
14.5 


3.2 
3.5 
4.2 
5.5 
6.6 

7.9 
9.4 
10.2 
9.9 
9.6 

9.1 
9.1 
9.4 
9.4 
9.4 

9.4 
9.5 
9.4 
9.5 
10.0 

9.2 
8.7 
8.8 
9.2 
9.2 

9.6 
10.0 
10.3 
10.9 
11.5 

11.9 
12.4 
13.2 
14.0 
14.9 

15.1 
15.6 
16.0 
16.3 

16.7 


.3 
.3 
.5 
1.1 
2.2 

3.4 
4.2 
4.2 
4.4 
4.6 

4.7 
4.7 
4.7 
4.6 
4.7 

5.0 
5.2 
5.1 
5.1 
5.2 

4.7 
4.6 
4.5 
4.4 
4.2 

4.2 
4.0 
3.9 
3.8 
3.8 

3.7 
3.6 
3.7 
4.0 
4.1 

4.3 
4.4 
4.4 
4.4 


.8 
.9 
.9 
1.0 
1.1 

1.2 
1.4 
1.5 
1.7 
1.9 

2.0 
2.3 
2.5 
2.7 
2.9 

3.1 
3.2 
3.5 
3.7 
3.9 

4.2 
4.5 
4.9 
5.0 
5.4 

5.6 
5.9 
6.2 
6.5 
6.8 

7.2 
8.0 
8.8 
9.7 
10.8 

12.1 
13.3 
14.2 
15.5 


53.0 
54.8 
62.9 
73.6 
84.0 

93.8 
102.9 
115.9 
127.4 
134.6 

134.5 
154.3 
170.1 
167.6 
164.6 

168.8 
173.6 
182.8 
191.3 
208.4 

210.2 
210.8 
219.3 
227.7 
235.8 

243.8 
260.8 
274.2 
288.0 
302.8 

314.9 
326.0 
351.8 
394.8 
478.5 

517.5 
579.9 
654.9 
708.3 

790.1 


3.4 
3.9 
4.1 
4.0 
3.5 

3.4 
3.2 
3.6 
4.2 
6.1 

6.8 
6.9 
8.0 
8.9 
9.2 

9.4 
9.8 
9.5 
10.0 
12.5 

12.8 
13.4 
14.7 
16.3 
17.6 

17.9 
19.5 
21.0 
22.3 
23.1 

23.8 
24.2 
26.9 
29.6 
32.8 

35.5 
39.7 
46.1 
55.6 

63.7 


43.0 


1941 


44.4 


1942 


52.4 


1943. 

1944 


63.7 
75.1 


1945 


85.5 


1946 


95.0 


1947 


107.4 


1948 


118.1 


1949 


123.2 


1950 


122.1 


1951 

1952 


141.3 
155.4 


1953 

1954 


151.5 
147.7 


1955 


151.2 


1956 


154.8 


1957 


163.5 


1958 


170.9 


1959 


184.8 


1960 

1961 


185.4 
184.6 


1962 


190.8 


1963 


196.3 


1964 

1965 


201.4 
207.0 


1966 


220.1 


1967 


230.1 


1968 


240.6 


1969 


252.3 


1970_ __. 


261.9 


1971... 

1972 


271.5 
292.7 


1973 


329.5 


1974 


404.4 


1975 _ 


435.7 


1976 


489.1 


1977_ 


552.2 


1978 


589.4 








1979* _. 


163.4 


21 


1 


654.2 



1 Beginning with 1961, horses and mules are excluded. 

' Includes all crops held on farms and crops held off farms by farmers as security for Commodity Credit Corporation 
loans. The latter on January 1, 1979 totaled approximately $2.1 billion. 

Note.— Beginning 1960, data include Alaska and Hawaii. 

Source: Department of Agriculture. 



292 



INTERNATIONAL STATISTICS 

Table B-96— Exchange rates, 1971-78 
(Cents per unit of foreign currency, except as noted] 



Year and month 


Belgian 
franc 


Canadian 
dollar 


French 
franc 


German 
mark 


Italian 
lira 


Japanese 
yen 


March 1973 rate _ 


2.5377 


100. 333 


22. 191 


35. 548 


. 17600 


.38190 






1971: Mar 


2.0145 
2.0109 
2. 0921 
2. 1986 
2. 2757 
2.2758 
2. 2742 
2. 2670 

2. 5377 
2. 6643 
2. 7089 
2. 4726 
2. 5040 
2. 6366 
2. 5364 
2. 7158 

2. 9083 
2. 8603 
2. 5485 
2.5311 
2. 5480 
2.5220 
2. 6046 
2. 7483 

2. 7258 
2.7713 
2.7910 
2.9608 
3. 1589 

3. 0590 
3. 2207 
3. 3637 


99. 367 
97.913 

98. 717 
100. 067 
100. 152 
102. 092 
101. 730 
100. 326 

100. 333 
100. 160 
99. 181 
100. 058 
102.877 
103. 481 
101.384 
101.192 

99. 954 
97. 426 

97. 437 

98. 627 
101.431 
102.712 
102.557 

98. 204 

95. 125 
94. 549 
93. 168 
91.132 
88.823 
89.143 
85. 739 
84. 763 


18. 129 
18. 092 
18.112 

18. 549 
19. 835 
19. 937 
19.977 

19. 657 

22. 191 
23. 472 
23. 466 
21.757 

20. 742 
20. 408 
20. 831 
22. 109 

23. 804 
24.971 
22. 367 
22. 428 
21.657 
21.109 
20. 334 
20. 055 

20. 075 
20. 240 
20.314 
20. 844 
21.256 
21.841 
22.909 
23. 178 


27. 538 

28. 474 

29. 794 

30. 593 
31.545 
31.560 
31.318 
31.262 

35. 548 

38. 786 

41. 246 
37. 629 
38.211 

39. 603 

37. 580 
40.816 

43. 120 

42. 726 
38. 191 
38. 144 
39. 064 

38. 797 
40. 169 
41. 965 

41.812 
42.453 

43. 034 
46.499 
49. 181 
47.984 
50. 778 
53.217 


. 16063 
. 16009 
. 16292 
. 16652 
.17161 
.17142 
. 17199 
. 17146 

. 17600 
. 16792 
. 17691 
. 15458 
. 15687 
. 15379 
.15103 
. 15179 

. 15842 
. 15982 
. 14740 
. 14645 
.12113 
.11780 
.11837 
.11521 

.11276 
.11295 
.11318 
.11416 
.11692 
.11634 
. 12050 
.11863 


.27971 


June... 


. 27979 


Sept 


. 29583 


Dec 


.31249 


1972: Mar 


. 33054 


June 


.33070 


Sept 


. 33209 


Dec 


.33196 


1973: Mar 


. 38190 


June 


. 37808 


Sept 


. 37668 


Dec 


. 35692 


1974: Mar 


. 35454 


June 


. 35340 


Sept 


. 33439 


Dec 


. 33288 


1975: Mar 


.34731 


June .. 


.34077 


Sept 


. 33345 


Dec 


.32715 


1976: Mar 


.33276 


June... 


. 33424 


Sept 


. 34800 


Dec 


. 33933 


1977: Mar 


. 35687 


June 


. 36652 


Sept 

Dec 

1978: Mar 


. 37486 
.41491 
.43148 


June 


.46744 


Sept _ 

Dec 


. 52656 
.51038 




Netherlands 
guilder 


Swedish 
krona 


Swiss 
franc 


United 

Kingdom 

pound 


United States dollar 
(March 1973 = 100) 




Multilateral 
trade- 
weighted 
average 


Bilateral 
trade- 
weighted 
average 


March 1973 rate 


34.834 


22.582 


31.084