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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.
<m)
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
247.24
100.0
100.0
1971: Mar...
27.816
28. 065
29. 308
30. 503
31. 384
31.296
30. 969
30. 962
34. 834
36. 582
38. 542
35.615
36. 354
37.757
36. 870
39. 331
42. 124
41.502
37. 229
37. 234
37. 149
36. 524
38. 390
40. 240
40. 079
40. 326
40. 604
42.955
45. 994
44.716
46. 733
49. 120
19. 369
19.370
19. 732
20. 434
20. 956
21.101
21.146
21.080
22. 582
23. 746
23. 769
22. 026
21.915
22.885
22. 333
23. 897
25.481
25. 532
22. 501
22. 685
22. 702
22.475
22. 998
24. 051
23. 726
22.625
20. 602
21.044
21.693
21.690
22. 592
22. 808
23. 254
24. 409
25.118
25.615
25.974
26. 320
26. 403
26. 526
31.084
32. 757
33. 146
31.252
32. 490
33. 449
33.371
38. 442
40. 273
40. 086
36. 905
37.970
38. 980
40. 484
40.431
40. 823
39. 209
40. 170
42.115
48.168
52. 693
53. 046
63. 765
59. 703
241. 87
241.87
246. 94
252. 66
261.81
256.91
244. 10
234. 48
247. 24
257.62
241.83
231.74
234. 06
239. 02
231.65
232. 94
241. 80
228. 03
208. 35
202. 21
194. 28
176.40
172. 72
167.84
171.74
171.91
174.31
185.46
190. 55
183. 72
195.95
198.61
120.2
119.3
115.8
112.3
108.4
108.2
109.1
110.1
100.0
96.5
95.1
101.5
101.6
100.0
102.9
98.6
93.9
94.8
103.0
103.5
105.1
107.1
105.7
105.3
105.2
104.4
103.8
98.4
94.8
94.7
89.5
88.5
114.6
June. _.
114.8
Sept
111.8
Dec
108.7
1972: Mar
106.0
June
105.2
Sept
105.8
Dec
106.9
1973: Mar
100.0
June
98.5
Sept
98.3
Dec
102.2
1974: Mar
100.9
June.
99.9
Sept
103.0
Dec
101.0
1975: Mar
98.5
June
100.0
Sept
104.9
Dec
105.0
1976: Mar
104.6
June
105.2
Sept
104.0
Dec
105.8
1977: Mar
106.2
June
105.6
Sept
105.4
Dec
101.9
1978: Mar
100.3
June
99.2
Sept..
Dec
96.0
96.3
Source: Board of Governors of the Federal Reserve System.
293
Table B-97. — U.S. international transactions, 7946-78
[Millions of dollars; quarterly data seasonally adjusted, except as noted)
Year
quar-
ter
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...
II...
Ill
IV
1977:1
II—
III..
IV..
1978: I.
II...
Ill »
Merchandise l:
Ex-
ports
11,764
16, 097
13, 265
12,213
10, 203
14, 243
13, 449
12,412
12,929
14, 424
17,556
19, 562
16,414
16,458
19,650
20, 108
20, 781
22,272
25, 501
26, 461
29, 310
30, 666
33, 626
36, 414
42, 469
43, 319
49, 381
71,410
98, 306
107, 088
114,694
120, 576
27,001
28, 380
29, 602
29,711
29, 477
30, 629
31,009
29, 461
30, 664
35, 067
36, 930
Imports
-5,067
-5,973
-7,557
-6,874
-9,081
-11,176
-10,838
-10,975
-10,353
-11,527
-12,803
-13,291
-12,952
-15,310
-14,758
-14,537
-16,260
-17,048
-18,700
-21,510
-25, 493
-26, 866
-32, 991
-35, 807
-39, 866
-45, 579
-55,797
-70,499
-103,649
-98, 041
-124,047
-151,706
-28,352
-29,963
-32,418
-33,314
-36, 502
-37, 263
-38,277
-39,664
-41,865
-42, 869
-44,975
Net
bal-
ance
6,697
10, 124
5,708
5,339
1,122
3,067
2,611
1,437
2,576
2,897
4,753
6,271
3,462
1,148
4,892
5,571
4,521
5,224
6,801
4,951
3,817
3,800
635
607
2,603
-2, 260
-6,416
911
-5, 343
9,047
-9,353
-31,130
Investment income 3
Re-
ceipts
772
1,102
1,921
1,831
2,068
2,633
2,751
2,736
2,929
3,406
3,837
4,180
3,790
4,132
4,616
4,998
5,619
6,157
6,823
7,441
7,531
8,024
9,377
10,920
11,751
12, 688
14, 694
21, 697
27, 541
25, 359
29, 244
32, 100
Pay-
ments
-212
-245
-437
-476
-559
-583
-555
-624
-582
-676
-735
-796
-825
-1,061
-1,237
-1,245
-1,324
-1,561
-1,784
-2,088
-2,481
-2,747
-3,378
-4, 869
-5,516
-5, 436
-6, 544
-9, 655
-12,084
Net
560
857
1,484
1,355
1,509
2,050
2,196
2,112
2,347
2,730
3,102
3,384
2,965
3,071
3,379
3,753
4,295
4,596
5,039
5,353
5,050
5,277
5,999
6,051
6,235
7,252
8,150
12,042
15, 457
-12,564 12,795
-13,311 15,933
-14,593 17,507
-1,351 7,027
-1,583 7,369
-2,816 7,428
-3,603 7,420
-7,025
-6,634
-7,268
-10,203
-11,201
-7,802
-8,045
7,796
8,088
8,220
7,997
9,381
10,003
9,946
-3,405
-3,332
-3,293
-3,281
-3,197
-3,60i
-3,610
-4,185
-4,503
-5,420
-5,396
Net
mili-
tary
trans-
actions
3,622
4,037
4,135
4,139
4,599
4,487
4,610
3,812
4,878
4,583
4,550
-493
-455
-799
-621
-576
-1,270
-2,054
-2,423
-2,460
-2,701
-2, 788
-2,841
-3,135
-2,805
-2,752
-2, 596
-2,449
-2,304
-2,133
-2,122
-2,935
-3, 226
-3, 143
-3, 328
-3, 354
-2,893
-3,621
-2,287
-2, 080
-876
312
1,334
-64
-30
237
169
568
295
467
5
210
592
177
Net
travel
and
trans-
porta-
tion re-
ceipts
Other
serv-
ices,
net 3
733
946
374
230
-120
298
83
-238
-269
-297
-361
-189
-633
-821
-964
-978
-1,152
1,309
-1,146
-1,280
-1,331
-1,750
-1,548
-1,763
-2,023
-2,315
-3,028
-3, 086
-3,105
-2, 522
-2,245
-3,044
-627
-399
-515
-704
-907
-759
-677
-701
-823
-626
-802
310
145
175
208
242
254
309
307
305
299
447
482
486
573
579
594
809
960
1,041
1,387
1,365
1,612
1,630
1,833
2,190
2,509
2,789
3,185
3,975
4,617
4,714
4,749
1,151
1,156
1,186
1,222
1,136
1,171
1,260
1,183
1,361
1,468
1,563
Bal-
ance
on
goods
and
serv-
ices ' *
7,807
11,617
6,942
6,511
2,177
4,399
3,145
1,195
2,499
2,928
5,153
7,107
3,145
1,166
5,132
6,345
6,026
7,168
9,603
8,289
5,966
5,712
3,573
3,401
5,654
2,294
-2,125
10, 766
8,905
23, 060
9,361
-10,585
2,731
3,181
2,227
1,223
-1,630
-1,440
-1,609
-5,903
-5, 576
-1,785
-2, 557
Remit-
tances,
pen-
sions,
and
other
uni-
lateral
trans-
fers 1
Bal-
ance
cur-
rent
count
4,885
8,992
2,417
873
-1,840
884
fal4
-1,286
219
430
2,730
4,762
784
-1,282
2,824
3,821
3,388
4,414
6, 822
5,435
3,034
2,587
621
406
-2,922
-2,625
-4, 525
-5,638
-4,017
-3,515
-2,531
-2,481
-2,280
-2, 498
-2, 423
-2,345
-2,361
-2,448
-2,308
-2,524
-2,638
-2,754
-2,781
-2, 854
-2, 932
-3,125
-2, 952
-2, 994
-3, 294 2, 360
3,701 -1,407
-3,854-5,979
-3, 881 6, 885
7,186 1,719
-4,615
-5,022
-4,708
-1,028
-1,040
-1,908
-1,047
-1,126
-1,243
-1,277
-1,064
-1,282
-1,317
-1,267
18, 445
4,339
15, 292
1,703
2,141
319
176
-2,756
-2, 683
2,886
-6, 967
-6, 858
-3,102
-3,824
i Excludes military grants. »:„;„„
-• Adjusted from Census data for differences in valuation, coverage, and timing.
3 Fees and royalties from U.S. direct investments abroad or from foreign direct investments in the United States are
excluded from investment income and included in other services, net. „«n„,«i»«
Hn concept the sum of balance on current account and allocations of special drawing rights is equal to net ore gn
investment^ the national income and product accounts, although the two may differ because of revisions, special handling
of certain items, etc.
(See next page for continuation of table.)
294
Table B-97. — U.S. international transactions, 1946-78 — Continued
[Millions of dollars; quarterly data seasonally adjusted, except as noted]
U.S. assets abroad, net
I increase/capital outflow (— )]
Foreign assets in the U.S., net
[increase/capital inflow (+ )|
Alloca-
tions of
special
drawing
rights
(SDR)
Statistical
discrepancy
Year or
quarter
Total
U.S.
official
reserve
assets 8
Other
U.S.
Govern-
ment
assets
U.S.
private
assets
Total
Foreign official
assets
Other
foreign
assets
Total
(sum of
the
items
with
sign
re-
versed)
Of
Total
Assets
of
foreign
official
reserve
agen-
cies
which:
Sea-
sonal
adjust-
ment
discrep-
ancy
1946
-623
-3,315
-1,736
-266
1,758
-33
-415
1,256
480
182
-869
-1,165
2,292
1,035
2,145
606
1,533
377
171
1,222
568
52
-880
-1,187
2,477
2,348
32
209
-1,434
-607
-2, 530
-231
-773
-1,578
-407
228
-388
6
151
246
329
180
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: 1
II....
III...
IV....
1977: 1
IL...
III...
IV....
1978: 1
II....
III*..
-4, 099
-5, 538
-4, 177
-7,271
-9, 559
-5,718
-7,321
-9, 759
-10,987
-11,593
-9, 340
-12,475
-14,461
-22, 823
-34,712
-39, 444
-50, 608
-34, 650
-12,365
-11,740
-10,269
-16,235
-1,334
-12,003
-6,615
-14,700
-15,036
-6, 134
-11,006
-1,100
-910
-1,085
-1,662
-1,680
-1,605
-1,543
-2,423
-2,274
-2, 200
-1,589
-1,884
-1,568
-2, 644
5 366
-3, 470
-4,213
-3,679
-762
-932
-1,340
-1, 180
-949
-795
-1,098
-838
-896
-1,176
-1,494
-5, 144
-5,234
-4, 624
-5,986
-8,049
-5, 335
-6, 345
-7, 387
-7,833
-8,206
-10,228
-12,939
-12,925
-20, 388
-33,643
-35, 368
-43, 865
-30, 740
-10,830
-9, 230
-8,522
-15,283
3
-11,214
-5,668
-13,862
-14,386
-5,287
-9, 692
2,294
2,705
1,911
3,217
3,644
740
3,659
7,378
9,927
12, 701
6,357
22, 987
21,696
18, 663
34, 677
15, 550
36, 969
50, 869
7,590
7,914
8,932
12,534
2,490
14,064
14,251
20, 065
18, 095
406
14,612
1,473
765
1,270
1,986
1,661
132
-674
3,450
-776
-1,301
6,907
26, 895
10, 705
6,299
10, 981
6,907
18,073
37, 124
3,819
4,017
3,070
7,166
5,451
7,884
8,246
15, 543
15, 760
-5,685
4,904
1,258
741
1,118
1,558
1,363
67
-787
3,367
-761
-1,552
7,362
27, 405
10, 322
5,145
10, 257
5,259
13, 080
35, 480
2,323
3,351
1,320
6,086
4,946
7,467
7,914
15, 153
14,956
-5,373
4,554
821
1,939
641
1,231
1,983
607
4,333
3,928
10, 703
14,002
-550
-3,907
10, 991
12, 364
23, 696
8,643
18, 897
13, 746
3,771
3,897
5,862
5,367
-2,962
6,180
6,005
4,522
2,336
6,090
9,708
867
717
710
-1,019
-988
-1,122
-360
-907
-457
628
-206
439
-1,515
-244
-9,822
-1,966
-2,725
-1,684
5,449
9,300
-927
3,073
1,685
1,018
3,525
1,600
622
-4,751
1,602
3,798
8,830
218
688
215
-2, 636
1,734
131
-179
-2, 229
2,276
160
-1
-2,411
5 Includes extraordinary U.S. Government transactions with India.
•Consists of gold, special drawing rights, convertible currencies, and the U.S. reserve position in the International
Monetary Fund (IMF).
Note.— Quarterly data for changes in U.S. official reserve assets, U.S. private assets abroad, and foreign assets in the
United States are not seasonally adjusted.
Source: Department of Commerce, Bureau of Economic Analysis.
295
Table B-98. — U.S. merchandise exports and imports by principal end-use categories, 1965—78
[Millions of dollars; quarterly data seasonally adjusted)
Year or quarter
1965
1966.
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1977: I...
II—
III..
IV..
1978: I...
II...
III '
Exports
Total
26, 461
29, 310
30, 666
33, 626
36, 414
42, 469
43, 319
49, 381
71,410
98, 306
107, 088
114,694
120,576
29, 477
30, 629
31, 009
29, 461
30, 664
35, 067
36, 930
Agricul-
tural
6,305
6,949
6,453
6,297
6,096
7,374
7,831
9,513
17,978
22, 412
22, 242
23, 381
24, 336
6,219
6,480
5,974
5,663
6,505
7,994
7,922
Nonagricultural
Total
20, 156
22,361
24, 213
27, 329
30, 318
35, 095
35, 488
39, 868
53, 432
75, 894
84, 846
91,313
96, 240
23, 258
24, 149
25, 035
23, 798
24, 159
27, 073
29, 008
Capital
goods
8,052
8,907
9,934
11,111
12, 369
14, 659
15, 372
16,914
21, 999
30, 887
36, 659
39, 065
39, 807
9,584
9,852
10, 286
10,085
9,969
11,062
12, 465
Other
goods
12, 104
13, 454
14, 279
16,218
17, 949
20, 436
20, 116
22, 954
31, 433
45, 007
48, 187
52, 248
56, 433
13, 674
14, 297
14, 749
13,713
14, 190
16,011
16, 543
Imports
Total
21,510
25, 493
26, 866
32,991
35, 807
39, 866
45, 579
55, 797
70, 499
103, 649
98, 041
124, 047
151,706
36, 502
37, 263
38, 277
39, 664
41, 865
42, 869
44,975
Petroleum
and
products
2,034
2,078
2,091
2,384
2,649
2,930
3,650
4,650
8,415
26, 589
27,017
34, 573
44, 980
11,574
11,536
11,306
10, 564
9,945
10, 807
10, 823
Non-petroleum
Total
19, 476
23,415
24, 775
30, 607
33, 158
36, 936
41,929
51, 147
62, 084
77, 060
71,024
89, 474
106, 726
24, 928
25,727
26,971
29, 100
31,920
32, 062
34, 152
Industrial
supplies
9,123
10, 235
9,956
12, 027
11,798
12, 467
13, 824
16, 349
19, 725
27, 975
24, 211
30, 000
36, 070
8,095
9,142
9,182
9,651
10,710
11,170
10,916
Other
goods
10,353
13, 180
14,819
18, 580
21, 360
24, 469
28, 105
34, 798
42, 359
49, 085
46, 813
59, 474
7C, 656
16,833
16, 585
17, 789
19, 449
21,210
20, 892 .
23, 236
Note.— Data are on an international transactions basis and exclude military shipments.
Source: Department of Commerce, Bureau of Economic Analysis.
296
Table B-99. — U.S. merchandise exports and imports by area, 1972-78
[Millions ot dollars]
Item
Exports
Developed countries.
Canada
Japan
Western Europe
Australia, New Zealand, and
South Africa
Developing countries.
0PEC»
Other'
Eastern Europe
Imports
Developed countries.
Canada
Japan
Western Europe
Australia, New Zealand, and
South Africa
Developing countries.
OPEC
Other 3
Easte rn Europe.
1972
1973
1974
1975
1976
49, 381
71,410
98,306
107, 088
114,694
34, 564
48, 529
64, 487
66, 496
72, 339
13, 109
4,963
14, 950
16,710
8,356
21,216
21, 842
10, 724
28, 164
23, 537
9,567
29, 884
26, 336
10, 196
31, 887
1,542
2,247
3,757
3,508
3,920
13,917
20, 834
32, 082
37, 343
38, 254
2,551
11,366
3,414
17, 420
6,219
25, 863
9,956
27, 387
11, 561
26, 693
900
2,047
1,737
3,249
4,101
55, 797
70, 499
103, 649
98, 041
« 124, 047
40, 643
48, 985
61, 092
55, 973
67, 488
14, 493
9,076
15,661
17, 694
9,665
19, 774
22, 392
12,414
24, 267
21,710
11,257
20, 764
26, 475
15, 531
23,003
1,413
1,852
2,019
2,242
2,479
14, 791
20,913
41, 580
41, 334
55, 375
2,974
11,817
5,097
15, 816
17, 234
24, 346
18, 897
22, 437
27, 409
27,966
363
601
977
734
875
1977
120, 576
76, 712
28, 293
10, 566
34, 076
3,777
40, 952
12, 878
28, 074
2,912
M51.706
79, 247
29, 664
18, 565
28, 226
2,792
70, 678
35, 778
34, 900
1,127
1978i
136, 881
84, 427
30, 059
12, 157
38, 261
3,949
48, 540
14, 779
33, 761
4,467
M72.945
97, 572
32, 875
24, 395
36, 120
4,183
73, 737
33, 163
40, 575
1,441
1 First 3 quarters at seasonally adjusted annual rate; preliminary. Detail will not add to totals because of seasonal
adjustment discrepancy and rounding.
'Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates
and Venezuela.
• Latin American Republics, other Western Hemisphere, and other countries in Asia and Africa, less petroleum exporting
countries and the International Monetary Fund.
4 Includes imports of nonmonetary gold from International Monetary Fund, not in area detail.
Note. — Data are on an international transactions basis and exclude military shipments.
Source: Department of Commerce, Bureau of Economic Analysis.
297
Table B-100. — International investment position of the United States at year-end, 1970-11
[Billions of dollars]
Type of investment
1970
1972
1974
1975
1976
58.6
37.1
58.3
73.9
80.7
165.5
199.0
255.7
295.1
346.4
14.5
13.2
15.9
16.2
18.7
11.1
.9
10.5
2.0
11.7
2.4
11.6
2.3
11.6
2.4
1.9
.6
.5
.2
1.9
.0
2.2
.1
4.4
.3
32.1
36.1
38.4
41.8
46.0
29.7
2.5
34.1
2.0
36.3
2.1
39.8
2.0
44.1
1.9
118.8
149.7
201.5
237.1
281.7
75.5
21.0
89.9
27.6
110.1
28.2
124.1
34.9
136.4
44.1
13.8
20.7
46.2
59.8
81.1
8.5
11.4
17.0
18.3
20.1
106.8
161.8
197.4
221.2
265.7
26.1
63.2
80.3
87.6
106.6
17.7
1.7
52.9
1.6
57.7
3.5
63.3
5.1
73.6
10.1
6.7
.0
8.5
.2
18.4
.6
16.3
2.9
17.2
5.6
80.7
£8.7
117.1
133.6
159.1
13.3
14.9
25.1
27.7
30.8
22.7
1.2
34.7
21.2
1.2
50.7
41.8
1.7
34.9
42.5
4.2
45.3
53.5
7.0
54.8
8.8
10.7
13.6
13.9
13.0
1977
Net international position of the United States.
U.S. assets abroad
U.S. official reserve assets
Gold
Special drawing rights (SDR)
Reserve position in the International Monetary
Fund (IMF)
Foreign currency reserves..
Other U.S. Government assets.
U.S. loans and other long-term assets
U.S. short-term assets other than reserves.
U.S. private assets.
Direct investments abroad (book value).
Foreign securities
Claims on foreigners reported by U.S. banks, not in-
cluded elsewhere
Claims on unaffiliated foreigners reported by U.S.
nonbanks
Foreign assets in the United States.
Foreign official assets
U.S. Government securities 1
Other U.S. Government liabilities
Liabilities reported by U.S. banks, not included else-
where
Other official assets
Other foreign assets
Direct investments in the United States (book value). .
Liabilities reported by U.S. banks, not included else-
where
U.S. Treasury securities..
Other U.S. securities 2
Liabilities to unaffiliated foreigners reported by U.S.
nonbanks
70.0
381.3
19.3
11.7
2.6
4.9
.0
49.6
47.8
1.8
312.4
148.8
49.3
92.6
21.8
311.3
143.1
106.0
11.8
18.0
7.2
168.2
34.1
60.2
7.6
53.1
13.3
< Includes Treasury and agency issues of securities.
2 Corporate and other bonds and corporate stocks.
Note.— Gold is valued at SDR35 per ounce, throughout. The SDR value is converted to dollars at $1/SDR before Decem-
ber 1971, at $1.08571/SDR from December 1971 through January 1973, at J1.20635/SDR from February 1973 through
June 1974, and as measured by the basket valuation of the SDR beginning July 1974.
Source: Department of Commerce, Bureau of Economic Analysis.
298
Table B-101.— International reserves, 1952, 1962, and 1974-78
[Millions of dollars; end of period]
Area and country
All countries
Industrialized countries ».
United States.
Canada
Japan
Austria
Belgium
France
Germany
Italy
Netherlands
Scandinavian countries (Den-
mark, Norway, and Sweden).
Switzerland
United Kingdom
Other Europe
Australia, New Zealand, and South
Africa
Oil exporting countries.
Iran
Nigeria
Saudi Arabia'.
Venezuela
Other*
Other less developed areas
Other Western Hemisphere
Other Middle East
Other Asia
Other Africa
1952
• 49, 187
36, 773
24, 714
1,944
1,101
116
1,133
686
960
722
950
817
1,667
1,956
1,559
1,509
1,699
177
500
443
579
7,187
2,086
826
3,479
796
1962
1974
62, 659
219, 799
49, 254
119,908
17, 220
2,561
2,021
16, 058
5,825
13, 519
1,081
1,753
4,049
6,957
4,068
1,944
3,430
5,345
8,852
32, 398
6,941
6,957
1,362
2,919
3,308
4,600
9,011
6,939
2,966
15, 138
2,066
6,068
2,030
46,995
211
289
268
583
679
8,383
5, 626
14, 285
6,513
12,188
6,343
31, 691
1,700
11,905
992
4,754
2,663
12, 055
988
2,977
1975
226, 852
121, 880
15,883
5,326
12,815
4,439
5,797
12, 593
31,034
4,774
7,109
6,191
10, 428
5,459
13,046
4,900
56, 533
8,897
5,609
23, 319
8,861
9,847
30,4%
10, 021
5,186
12,513
2,777
1976
257, 402
131, 849
18, 320
5,843
16,605
4,410
5,206
9,728
34, 801
6,654
7,387
5,636
12,993
4,230
13, 734
4,602
65, 233
8,833
5,203
27, 025
8,578
15, 594
41,983
15,215
5,778
17,912
3,078
1977
317, 847
169, 356
19, 392
4,608
23, 261
4,244
5,761
10,194
39, 737
11, 629
8,065
7,539
13, 830
21, 057
15,668
3,657
75, 495
12, 266
4,259
30, 034
8,214
20, 722
53, 670
20, 296
7,472
22, 141
3,763
1978
November
347, 874
198, 808
18,605
4,487
32, 730
5,345
5,820
13,319
52,301
14, 123
6,930
9,955
18,381
16, 770
21,296
4,018
59, 326
1,619
19, 761
6,526
64,427
26, 716
8,547
25, 390
3,776
1 Includes Cuba.
1 Includes Luxembourg.
1 Data beginning April 1978 exclude the foreign exchange cover against the note issue.
4 Algeria, Indonesia, Iraq, Kuwait, Libya, Oman, Qatar, and United Arab Emirates.
Note.— International reserves is comprised of monetary authorities' holdings of gold, special drawing rights (SDR),
reserve positions in the International Monetary Fund, and foreign exchange. Data exclude U.S.S.R., other Eastern European
countries, Mainland China, and Cuba (after 1960).
Source: International Monetary Fund, "International Financial Statistics."
299
Table B-102. — Summary of maj 
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