Beige Book

CONFIDENTIAL (FR) CURRENT ECONOMIC CONDITIONS BY DISTRICT P r e p a r e d for the Federal Open Market Committee by the Staff January 12, 1971 T A B L E OF CONTENTS SUMMARY page 1 First District - Boston page 1 Second District - New York page 5 Third District - Philadelphia page 7 Fourth District - Cleveland page 10 Fifth District - Richmond page 13 Sixth District - Atlanta page 16 Seventh District - Chicago page 19 Eighth District - St. Louis page 22 Ninth District - Minneapolis page 24 Tenth District - Kansas City page 27 Eleventh District - Dallas page 30 Twelfth District - San Francisco page 33 SUMMARY Business and other conditions observers Reserve Districts January compared late spurt recent sales expand inventories employment were slightly improved record or grow. output in the m o n t h s of financial tailing was further higher tively low at food Most sales just dollar cent off prior higher higher prices Federal sales slow the c l o s e to well than but sales began volume predominantly such as TV demand and is is rise number and of banks industrial plans continue of in the lower sets and high priced quality the rising expectations additional ago, con- to liquidity continue means products, a year of cur- notably resulting to meats, in rela- incomes. sharp holidays, into with farm increases in retail resulted in total which and, Pre-Christmas extending The for farm just output. to envisioned reported sharply intentions seekers price levels, the job most declining ex- of investment than sizable However, factory increasing the C h r i s t m a s to are ago. reported for discussion planned by the capital prices ago. a year followed gains but Reserve a year of the y e a r and above were color above Output of early volume moderate advances. and the d o l l a r weak intensive December pushing availability to Federal a increase Rising late twelve report been ahead, in the businessmen Retailers levels remains firms. leading not to Some Credit above in by earlier. sales, has to prevail, a month and w e l l tinues pared. as v i e w e d conditions situation be nation economic in C h r i s t m a s levels the of with pected in in some sales before the new apparently the holidays, year. items. clothing cases, Higher The 6 per started and sales priced continue 5 to the gains items to m o v e slowly. Retailers vative report levels, sales w i l l that indicating no that new change was steel thermore, ments than demand an steel foreseen about first. have goods doubt remain that Much increase a month gains in sales of and this for The sharply expect second at very the r e c e n t conser- upturn with the Cleveland Bank reports in pickup to b e m u c h is b a s e d on The Richmond Bank With the generally In c o n f o r m i t y occurred with in not this the ship- stronger rising reported exception do Fur- in s t e e l gain strike. fact since mid-December. a big inventories. recently compared quarter anticipated manufacturers expectations. have the a steel however, closings ago. economists in m a n u f a c t u r e r s ' companies, optimistic increased March in p r e p a r a t i o n plant most considerable cautiously industry steel and are orders to b e g i n the of continue. Manufacturers that inventories of indicate view, some electronics the great layoffs and TV Indus t r i e s . Most ployment is Reserve likely in e m p l o y m e n t , the the in labor Most rates and rather ahead. easier Bank productive continue are process reports Capital Richmond indicate of the u n e m p l o y m e n t force the m o n t h s to however, retrenchment creases banks than not firms several current months. as m o s t is a b o u t rate will high Further reports complete. primarily rate unem- declines indicate Any reflect of future that in- additions to layoffs. to s o m e Reasons given moderate include gains the m o r e in construction favorable in interest terms. investment reports the expected point payment capacity for that that plans apparently manufacturing as a p r o b l e m . The continue respondents Chicago to b e pared. often Reserve Bank cite The excess reports that at a number or below authorized is o n l y ing depreciation 60 p e r plans, with cautious All and demand cies cent and has closing been more of new most and Dallas, for vary as feed the m o n t h s have numbers of of m a r k e t i n g s livestock returns to that credit 1970. very became Savings high in recent reports of more or of on numbers will and rubber is in firm Excludexpan- connection increasingly at banks months. availand saving! Business aggressive inflation Practical while means lending of type some decline and margins farms, in to of farm the h i g h e r loan poli- occur higher food a major stabilizing to another. policy and M i n n e a p o l i s incomes is gen- report policy to controls. income have during prices. may prices livestock production likely incomes to an poultry however, to be for District of Atlanta opposition continue offered form adamant Low meat profit 1971 heretofore. solution, out the industrial it inflows some despite farmers is m e n t i o n e d , that from that outlays expenditure. of m a j o r reports the livestock reports capital a large actual one R e s e r v e ahead. reduced of from the a d o p t i o n for reports widely support leveling of to k e e p planning. and than varying A of been respondents for no expectations example, favored level are businessmen. however, Cleveland investment weeks decided appropriation 1970 concur have have 1971. there frequent prices, erally the declining, Inflation worry in conservative companies are of when and firms equipment respondents the loan and utilities, sion in important plant public able of be and in higher producers. resulted costs. 1971, prospect The priced large in a h i g h level Readjustments resulting in in higher Apart from employ more had essentially no fiscal noting his surprises new belief than w e comment this that the a d m i n i s t r a t i o n think, month. Professor will Wallich SECOND Opinions both ing expressed the N e w Y o r k businessmen suggest continue been slower been relatively sustained the y e a r . in the in tial level in the a u t o was of then, later for of With contacted last regarding to h i g h e r and the looked for forthcoming the The directors as rapidly as they and had until mixed as bond economic felt as to that very increase City the chairman he felt than a encouraged department in e c o n o m i c were from that not poten- economic The that felt the market. strongly stated smaller outlook outlook of a N e w Y o r k later negotiations economic he had real significantly expected. City bank no labor corporate general to c o n s u m e r that primarily priced general has store activity in the year. respect The is in the o v e r a l l a moderate reported year's, Christmas. ago, and the New Y o r k the p r e s i d e n t only part strike of a l a r g e of m o n t h s while looked recovering recent s a l e s "have were on in retail Sentiments in emerged holiday to b e 1971 surround- strike expected optimistic. the GM encouraged in the have other the GM booming, in by of from spending is not expressed not the b o a r d couple not and uncertainties Recovery consumer of b o r r o w i n g s settlement less but Bank Directors, Branch, that expected; industry. particularly activity been industry The views not outlook YORK Reserve the i n c r e a s e d The settlement steel than Federal evidence. good, - NEW the B u f f a l o economic in pickup by and that t h a n had in of Bank the n e a r - t e r m months DISTRICT pre-holiday because retailers items, spending, of a big reported but sales, the in d o l l a r s , spurt continued favorable retailers in were exceeded the w e e k consumer responses that before resistance to s p e c i a l sales, and the v o l u m e good. a These levelling latter with of industry. Some plant did expect pects were directors smaller tion, little could bank, market in s u c h of a large that the end early that to the the of by the evenly January, in the 1970 demands the that is the b o n d market but that Accordingly, he On hand, the o t h e r be a significant decline The connec- little and that be the corporate New York and little The would be the decline among "soft" be higher companies would some from other 1970 City president consensus rates would felt pros- the concern, highs. reported that that this in large there would record they abated. borrowing of an significantly inflation, concern four months, the m a r k e t . curbing felt manufacturing felt be that chairman their not of that one. contacted prospective bank felt be a lengthy would steel manager stated however, divided the In until wage a large -- in auto w o r k e r s . toward The from the Others, that w e r e mixed. year. there would about corporation settlement achieved executives of were strike would regarding borrowings or steel any expected were — received being three opinions strike. that that been a pickup general the m a n u f a c t u r i n g the n e x t and including of a R o c h e s t e r corporate spring has through directors the p r e s i d e n t chairman the business far strike Sentiments bond front, a long be through good so year. businessmen was for sales of a p o s s i b l e agreed other retail the d u r a t i o n of good than progress the to upstate looked in s a l e s the l a b o r respect not post-Christmas retailers off part On of by come directors levels. in felt THIRD Some minds sales anticipate Bankers, however, as a d i s a s t e r apparently in P h i l a d e l p h i a ahead then of last the s a l e s above sold a year then for pace Items big ticket items a r e not One large retailer were marked inventories along down and entire probably slide Nonetheless, that w i l l sumer. level. 40 per excess stock. back they to are spotlight $100 Some by "bargain to try some store cent down small report quickly expect price pace and for were buying" opportunities other at example, of high passed purchased sales the price retailers. because aggressive in shading suits, in cent appliances, area that Since to 6 per marked These markdowns motion 2 per televisions of m e n ' s who turning department rising substantial retailers slow The "started of D e c e m b e r . a manufacturer consumers going Color Consider- sales about other though, types capacity. their large that w e r e well. that months. soft. well." only stereos, reports Most ran the inflation. three weeks selling, cent One report six Christmas dramatically, particularly to p r i c e - c o n s c i o u s tailer's sales portable clothing the m a n u f a c t u r i n g up and into Manufacturers the n e x t fairly back Retailers remains that week. under and demand up first creeping expected. during report that picked Radios, sold than unemployment ended the to b e District. loan Christmas indicates ago. briskly. that retailers was year appears better about and PHILADELPHIA in s h i p m e n t s report persists - the T h i r d out an increase concern point in turned Philadelphia off optimism of b u s i n e s s m e n Christmas able cautious DISTRICT the re- will coming months. advertising for the con- For ers first are bullish believes over an the basic to who half Bankers soggy are loan thermore, He one of from seasonal Most a lot in in businesses looking are around lieve for for may mean is no but it a l s o reflects a that "things will better." is s u s p i c i o u s than that mostly there get of this more budding on e x p e c t a t i o n s is m o r e a weak the e c o n o m y they had because he does help reports these funds with further some loan that for "hopefulness" economy and and loan demand anticipated. of not the n o r m a l expect any demand Furpay relief be- a drop improving business made a sizable number outstanding. been made are terms. This the c o n s t r u c t i o n in i n t e r e s t that rates are in The they shopping industry the of still however. Apparently favorable in says loans by remain have financing, more quality One banker loans which people declines seeking it has commitments permanent that actively problem. construction to w h o m around that rise reflects both months are rate would for shopping notes banks One bank commitments will optimism talk a b o u t that slowly coming funds discount psychology. activity now factors. obtaining the majority emerging that still say more the large manufactur- expectations. banker Philadelphia cause this is b a s e d He adds A business strike, it regional orders. psychology the w h o l e city loans of In part 1971. demand. down level says to such on recovering new summer, is a m a n u f a c t u r e r , of "substance" late and Motors in b u s i n e s s however. second than general six m o n t h s . director, the since sales the G e n e r a l change optimism, about the the n e x t end One that time wind. be- Although than a few w e e k s express less, that there a deep a feeling the "worst the b e s t . " ago appears in concern seems to be the T h i r d about to be is b e h i n d less District, inflation emerging us and pessimism and in somehow most in general businessmen unemployment. the b u s i n e s s things now still Nonethe- community will work out for FOURTH There has Fourth District strike and is evidence slowdown in an the their as a r e s u l t doldrums, expressed capital and recent and in orders in and cent of the p r o p o r t i o n late the per cent Economists orders orders, however, generally later. Extended strikes steel fall shipments by GM w i l l at not be for three to G M ; stimulate area of small reporting much was price re- production, gains larger a decline cent steel sharply call to the in inboth first purchasing declines out- increases. major increased but December reporting three continue directors Ohio agents showing the per reporting from have Ohio our There were month, firms in w h i c h of orders, purchasing of remain's gains. in n e w last the residential northeastern Significantly, 1962 in in D e c e m b e r . production in n o r t h e a s t e r n new the inventories since numbered in there awards designed measures auto industry building recovery the reflecting One agents per tool in the however, is c o n t i n u i n g . deterioration the of weakness The machine productivity month last orders; and categories. slowed steel investment those that The activity settlement policy increases agents the for employment, creases economic the need a further in n e w in CLEVELAND non-residentia1 however, Purchasing ported - underlying goods. decline. construction, of in persistent capital sharp a rebound improvement of in been DISTRICT some companies since delivery General of delivered the mid-December. in F e b r u a r y Motors steel until reported plants orders February. The or have placed All of the up in steel industry shipments quarter would that this is Among our budget contains an authorized to 60 per He noted immediate of that plant of the that an investment effect on the level firm's have a drastic impact on lays in 1971. In a l l likelihood, fect of such slightly get. The spending he the degree austerity firm programs, the but he firm's industrial did in management main note a recent products, He director, several in m a n y in 1 9 7 1 . who the about This the firm its that he director strongly capital that demand for firm a and is uncer- reflection business activity. consultant that recovery bud- for the is a s s o c i a t e d a substantial relax outlook in or ef- capital large is a m a n a g e m e n t reported to chemicals phenomenon not out- indicated the in have capital business in g e n e r a l firms appropriations the m a j o r into particularly industries, of the capital would additional indicated trend of director a but w o u l d near-collapse is a t e m p o r a r y downward pessimistic activity about this A second built optimistic flow, level with 1971 credit cause undertake occurring expenditures he a d d e d , to This materials. a continued firms not be however. nontire tain w h e t h e r for of would is m o d e r a t e l y 1971, of would actual cash the a c t u a l a program firm's tax also 1959. equipment of second They is a s s o c i a t e d and pick- the strike since the cent that first. a steel been the big and the one who indicated that March than it has directors, firm felt about stronger the h i g h e s t rubber 1970. begin the p r o b a b i l i t y larger equal would be much commented year economists in urges senior with re- business that some form of accelerated capital spending. celerated that in p r o d u c t i v i t y On volume per more that of sales profit cent the number in the margins. of the be quarter the for capital improvement a large firm's de- Christmas level and outlays were protect in the He 3 also increased Because improvement sales nearly projections. season. should ac- reductions. 1969 internal promotion employees, fourth the the the C h r i s t m a s for immediate cost stimulate that instituted economist that to suggested in an above firm's and he further reported 6 per during to side, chain than result lead advertising substantially unchanged and 5 to schedules would retail store was cent noted the is n e c e s s a r y In p a r t i c u l a r , depreciation expenditures partment depreciation of the an volume firm's FIFTH DISTRICT Surveys of b u s i n e s s m e n indicate general weakness in agreement shipments, in m a n u f a c t u r i n g ; some slight but not consumer diate (4) m o r e goods loan loan future bankers the following of or despite price declines in over current and improvement weakness loan some outlook orders manufacturing, in b u s i n e s s (7) a f a v o r a b l e of sales (3) s o m e but continued backlogs in r e t a i l banks, District (1) (5) c o n t i n u e d district discouragement and sales: (6) c u t b a c k s and the F i f t h points: orders, services; at in improvement numerous demand demand; new in a u t o m o b i l e construction; mortgage RICHMOND and (2) g e n e r a l in r e t a i l residential and volume improvement in e m p l o y m e n t ; on - in demand increase for the business in immecondi- tions . Although consensus orders of and months hosiery in r e t a i l three months is n o t e d when as indicate improvement Automobile sales from reduced of new and metals Reporters services the dismal output or and district sales significantly fibers, the elec- weakness materials, improvement. bankers seasonal remain weak, auto of Important that some the backlogs in b u i l d i n g in l i n e w i t h reportedly and synthetic indicate stability sales, orders, are mixed, of D e c e m b e r . chemicals, remains. trade manufacturers the m o n t h nonferrous in improvement volume industries several and district during Businessmen tations. sales. weak equipment, furniture, from shipments, in s u c h the p a s t report that continued producers trical is reports expec- although reports affected of some the past district Manufacturers of finished been are goods, reduced. reported less tinue well comments in may their reduction nificant in among is bankers in the metals, and Respondents are no in r e t a i l their the have become although district as employment declines have an con- reports bankers indicate decid- they District report tapered increase off, in employ- their respec- expected. that and the m a n u f a c t u r i n g in length continue declines labor of supplies in sector, the w o r k w e e k s . to i n f l u e n c e the by the trade in p r i c e s and for the some further Several sig- employment during on w a g e s of p r i c e second durable the p a s t however, nonferrous and nondur- four report is r e p o r t e d l y increases consecutive in c h e m i c a l s , in b o t h services, pressure reports producers manufacturers, change Upward outweigh in D e c e m b e r reported report advances. in price Most District levels district. coal. across that report the inventories reportedly Respondents' employment services manufacturers Declines lines, in in inventory manufacturers, to s t a b i l i z e . areas however, of month. strong high, current have in e m p l o y m e n t indicate and inventories increases. seasonally reported district price as remain Reports tion trade strikes, situation able received in D e c e m b e r areas district of increases preferred. declines reports respective District tive among slight however, than be beginning reporters ment areas, further numerous situation and of further retailers' to be h i g h e r to o u t n u m b e r as that while In b o t h Reports edly report weeks. continued continuing board. bankers respective report areas that on b a l a n c e remains weak, residential but the construc- proportion reporting from the increases respondents residential is yet sumer loan to r i s e field, moderately for bankers demand, business to h a v e however, slightly. expectation Nonresidential demand district an construction to i n c r e a s e The by indicate occurring. continued continues but of no increased however, the p a s t loans and declined four reportedly recovery reportedly loans during increased in weeks. mortgage sharply received activity significant building, in Comments is reported December. during the Con- same period. The degree concerning While from the the prices, indicate inventory unresolved problems at favorable some district been signs mentioned excess present. of respondents diminishing discouragement respondents and survey on b a l a n c e , in e m p l o y m e n t , frequently levels has stronger weakness Manufacturing among outlook remains to e x h i b i t been most dence. high outlook economy optimism economic respondents rising have the of comments over the recovery. and in p a r t i c u l a r for September received failure of Continued the e f f e c t s as r e a s o n s productive since of lack continue capacity strikes of to among conficite their SIXTH A research indicated slight purchases of department year less sales. of increases lowered in tors of the type of incomes other men According East Nashville hand, preferring The highest per cent. though a store cent decline. tion strike that consumers chasing sales The of the New has continued big for at in TV a TV sellers at consensus been at least sales tube and gain the n e x t stream have not been by direc- opposition to any Directors, Nashville reported a 1- that it All with on the business- "buying down," "sales not will months. sales was 2-per cent to a move were Toys, as w e l l continue gain, a 10 per indicated is, be slow. off which as pur- expected, very laying 4.5 construc- that As might the Atlanta, surveyed. experienced TV's, by in were respondents in K n o x v i l l e . did to attributed evidenced six of conducted in D e c e m b e r particularly that rates executives of m e r c h a n d i s e . Christmas, a steady policy, store largely plant continued expectation Branch incomes settled. is executives controls. to p r a c t i c e lines was an indicated this w a s now adamant Orleans, respondents Birmingham loan Surveys department "high-ticket * items, general by" to r i g i d seven However, sluggishness usually come in of an reports, Jacksonville year-to-year expensive 1,600 workers The of that less The store in D e c e m b e r , and consumer indicate Birmingham, Most and Branch 28, estimated in s a l e s Florida. guidelines department to n e w s p a p e r some v e r s i o n On D e c e m b e r Jacksonville, gains or policy. expect of merchandise, continues Tennessee - ATLANTA survey to y e a r expensive sluggish price DISTRICT of are expected. to be hard tc Sluggishness a factory who representative reported other in e x p e n s i v e hand, that for merchandise a high-quality orders were off 30 p e r retail sales were reported actual or p r o p o s e d was line cent very also reported of m e n ' s this clothing, spring. strong by On in O r l a n d o the and Knoxville. Many to our dents attention: of rates telephone rates central Florida 15-word messages nine west telegraph rates on in K n o x v i l l e prices wages from by $1 to price up 20 per $1.50. an a v e r a g e in G e o r g i a gasoline petitioned the ICC of 11.35 tax for has for m o s t from per been a rate A for resi- Florida $2.75, and have raised cocktail construction 2-cent recommended. hike. and come to raised cent. to intrastate $2.25 Airlines recently continue Georgians counties, cent. TVA increases per Louisiana milk workers' gallon Railroads gas increase have prices also may be raised . Special reports indicate that trade is reported to be h o l d i n g along the G o l d Coast. mixed. The Gulf Coast advance bookings are weak Orlando areas getting underway open South there groves, some fruit Georgia they of an prosperous. in T a m p a , in M a r c h . Florida. Florida that remain expect late but the may be that November crop left businessmen in h o u s i n g also think inflation than unemployment. to rot on cut to be and is will strong through so but in west abundant trees. by in b u s i n e s s a local this construction and will of be more airport remains is up w e l l , building a swath expected season The Tampa $80-million freeze is s t i l l tourist office construction surveyed pickup 35-story the n e w Residential The a modest increase and A the F l o r i d a newspaper year, consumer a problem report mainly because spending. in the They state An administrator in the A t l a n t a from the Meanwhile, due to vicinity transfer He a t t r i b u t e d of of the reports students switching several economic a publicly private from to Directors are nearly unanimous in guidelines and They that those tary are by in are of other rates a drop businessmen enrollment vigorous surveyed opposition long philosophically repugnant and are worried that will be wasted only support loan East 1969 is where and among Tennessee, One that and reported was easy consumer the y e a r . rates during is Director or by for w a g e to r e p o r t s , during away at workers such 1970. monetary workers An still did have rate for not increase bank, striking in of by mone- fiscal not encountshop. been reductions the rise stability along consumer especially at Budget. Most made and price formal in a b a r b e r rates explanation and that guidelines although rates and progress price loan one Atlanta are past them Federal unworkable. the p a i n f u l by to w a g e is area, colleges. in jawboning delinquencies Lakewood report benefited slowdown. for in F l o r i d a consumer and strong time Nashville expected their their the According lowered economic a balanced The any general college has private of restraint ered institution support surveyed policies. two-year conditions. Nashville controls the his expensive colleges Our argue that supported GM. with loan in the SEVENTH Retail labor continues remains very shipments very are sales large cellent. are and continued Total retail trade to b e cases) items. Price drastic than growth: some Results but are in p a s t of expanding the n u m b e r colleges, and tone h a s shopping areas centers. promotions avoiding reductions been and a gradual high be ex- financial on somewhat. surged have varied shopping to s a l e s The n u m b e r is apparently Downtown will producers cautious relatively steel new Overall, rise in unemployment inflation. a stronger to s u b u r b a n in m a n y supply sales weeks. responding but w i t h price and anticipate have firms remain in other of equipment output but has m o d e r a t e d leaders 1971, however. Lenders supply a rise inflows of b u s i n e s s The capital vehicle for G . M . , Savings inflation for indicate Motor quarter positions general post-Christmas lose in Christmas, tailers, quarter. financial CHICAGO Demand trends schedules. Price activity demand. improving. - in l a t e D e c e m b e r . order first Liquidity business before first the commitments. and New output institutions total to o u t r u n the in cutting increased slow. in DISTRICT in last week continued in greatly among are goods on s a l e m e r c h a n d i s e the re- continuing Customers (started luxury the are before and big appear to said Christmas ticket no more years. job for of seekers a number continues of reasons, ex-servicemen, the n u m b e r of to g r o w . reduced secondary other The than enrollment workers labor natural at attempting to all supplement family categories applicants for has improved. new hirings. mands of of training less Despite organized for reduced levels. are translated going The ahead slump ducers firms in have decided in a month demand Some began several Some months for curtailing salaries cisions . has past service hurt some at, restrict de- standards. remain but at these are improvement. district A number outlays selling, utilities of pro- important or b e l o w , on a b r o a d customers delayed December inventory steel in steel local year has day faded ahead will de- for with are of of at dates especially l a c k of reduced funds. revenues and encouraging steel as in their strike next prices 1970. in M i c h i g a n , Higher is the guaranteed in to Foreign months stimulated expiration various about deliveries in r e c e n t be front tax p u r p o s e s . inventories orders the for companies governments, programs coupled to values Auto 60-90 prior a full Some and of markets, equipment improve to r e v i v e . to lay protection. by Public tools. capital labor heavy in to s h a r p l y to for A m e r i c a n suppliers cutting quality to be n u m e r o u s , expansion to k e e p orders year-end expected fixed and people door-to-door easing sales. industry The continue remain said hit 1971. ago. minimize are for of as of b u s i n e s s actual the a i r c r a f t machinery Steel not plans of preciation groups Inquiries with signs types into such managements worker has experience. jobs, these most Unemployment and desired Meanwhile, Orders not income. wages necessitated are and these de- Savings high, inflows often record, institutions demand at Policy loan at levels in b o t h large commercial banks demand at life banks and S & Ls h a v e been at in r e c e n t months. This and cities. Business is small far b e l o w insurance is last y e a r ' s companies very true of loan levels. continues to moderate. One base, large despite decision was other reduce actions bank the decided relatively apparently will be the e f f e c t i v e recently high based on t a k e n by cost of cost the to m a i n t a i n of these funds. expectation the F e d e r a l retaining its that Reserve Eurodollar Eurodollar This some System to balances. EIGHTH Reports mistic sales are regarding were are stant, larger output this year. ulation. respect substantial in the above in sales and investment point planned that inflation the will gains in through Christmas current continue sales and high levels that demand gains the investment capacity opti- employees the m o d e r a t e capital more indicating holding to h o l d production believe still some to ago. the h i g h e r and expect rate slightly than a m o n t h Although firms to both business and during Cautious of began District, and conand already current continues to inventory accum- rate throughout optimism as the m a n u f a c t u r i n g however, continues of n e w capital equipment of to employees is the plans the r e p l a c e m e n t levels for had much of most unemployof the of Christmas into 1971. in p a r t of 1970; than sales to approached, This reflects the extended influence on year. expansion are later report a depressing A period generally as maintained the b u s i n e s s firms. as no m a j o r investment and strikes shopping chains levels expected in St. L o u i s part retail earlier over Teamsters Christmas leading have been activity a large their year levels conditions General Motors New of expected retail depressed hiring of higher customers Eighth the h i g h e r increase most year. builders this tightening outlook are year. be w e l l the rate Home LOUIS expectations, manufacturing Although and the Respondents and normal above - ST. of b u s i n e s s m e n economic the new expect with current into year. and Belt prevail the reducing achieved a sample generally continuing they ment from DISTRICT outlook of generally obsolete general plans limited is e x p r e s s e d are retrenchment, in p r o s p e c t , to r e p l a c e m e n t restricted facilities. by and personnel. to l a b o r saving Home and this cent of building industry above the new housing earlier, and builders point but also they retard as of business the in 1971 to a v e r a g e Last year relatively low level units to constructed the for lower that for homes. new the drawn homes against were down of One a while in b a n k i n g . Banks funds Home sign, tends to and some rates paid this tendency report a more past and per year cent. liquidity, to 15 number optimistic referred insufficient from 35 per credit banker area, the unemployment increasing for St. L o u i s cent as an rate demand squeeze 55 per rates report stable. profit 1970. down the h i g h e r declining generally checks was new institutions at of interest observe rising due loans. Agriculture poor in construction the p r o s p e c t i v e number up new concern remain turned expects Financial savers already expenditures demand express has harvesting tion w a s was in r e t u r n s to the E i g h t h weather reduced harvested in of during District the a u t u m n substantially by below quality, cotton average farmers. Returns have been relatively low soybean producers have quite The continuing activity is of planning further ment, however, total demand, inflation concern upward that and to m o s t price moderate that the months. in causing to recent affected Cotton and produc- the a further livestock and months, while by cotton reduction poultry rice pro- and well. despite the s l o w d o w n businessmen policies should against in interviewed, adjustments. fight adversely adverse weather, duction fared was There is business and general prevail with inflation should many are agree- respect to continue. NINTH Businessmen cerned some about type though due "incomes in the to labor the spending the sumers look year. According farm level. for loan our farm demand also latest income and many of m a j o r to b e feel if con- that further granted in equaled if not 1970. that in e c o n o m i c spending because of credit to a q u e s t i o n on the labor in 1971, Christmas bettered district activity credit are Al- disputes^ difficult agricultural and to be to be a c h i e v e d . disclose recovery is h i g h are expected probably continue be necessary is f r e e concessions a modest district is Reports to District performance, present district sales MINNEAPOLIS inflation bargaining year's survey, of at large wage in - policy" will rate the D i s t r i c t district the N i n t h the e c o n o m y ' s of reductions in DISTRICT last con- next conditions depressed, extensions and and refinancing. In "incomes response policy" directors indicated the a d o p t i o n are, abhor comes type some many type of as generally favor some type that policy" not in his of rigid they wouldn't did to the in his work not and favor that an such did director "incomes should program or an policy" "in- voluntary involuntary stated and director support a jawboning a rigid bank Businessmen One not an support a policy controls. that Another policy." of v o l u n t a r y area of inflation, businessmen form type believed be a c c e p t a b l e . area district wage-price businessmen for to f u r t h e r "incomes vague program would that very any reported men of however, take and as a d e t e r r e n t desirability that and program business- felt the problem could labor. Two to w e r e reluctant One labor with leader early disputes bank for for trades. did the in 1970 and management District equaled however, were and and practical. tended are aggressive were and those who Reports vations this down this were reported bettered one year. the year. to h a v e policy." along broadened to union of m a j o r A labor survey are in of scheduled construction membership wage will strike be will concessions difficult for leadership. offered that free several that during last and to p u r c h a s e As go of talked "incomes Airlines the l a r g e cautious price director the sales E v e at Automobile improved in conscious value as u s u a l sales had expensive a good and hotels couple did luxury that and of Con- their retailers in o n e a r e a last in less revealed Cities season levels. probably ticket survey the sales indicated, of big Twin Christmas that w e r e consumer business the year's items A newspaper for N e w Y e a r ' s were for spending conducted indicate off union if not of was negotiations bargaining consumer spending while that and and they he would seven m o n t h s . indicated because an power dividends. District labor granted more and that director of that the N o r t h w e s t workers leaders a policy reveals satisfy sumers, such the N i n t h mine labor however, profits of the m o n o p o l y the a d o p t i o n in to probably if that time the One breaking first be hard both state, wages, left directors 1971 to s u p p o r t settlement December by reported controls besides The corrected directors wage-price include, in be who season, poorly. items reserrestaurants the district of w e e k s . Upper Michigan has business is v e r y farmers farm excellent in his good. area machinery snow conditions Also, recently one director have and w e r e m a k i n g this y e a r , been disclosed shopping purchases and if its that around they ski for received price concessions. Bank expect in economic 1970. his directors One area are depleted by The generally conditions director, going to in 1971 however, take Christmas report results of our of agricultural credit income in the d i s t r i c t a reduced over needs dations. to lend usual and has abnormally that in come and pect in the n e x t any the and three of areas affect than that m e r c h a n t s no in inventories of there will for caused credit in factors, be even credit also the n e w during farm the the lower loan 1971 ability banks expect farm and inre- ex- requests that corn program a tide- however, revealed the d i s t r i c t ' s and by or extension bankers, farm consoli- Bankers credit-worthy survey income or depressed purchases loans ratios. agricultural expect farm seasonal demand bankers quarterly reveals extensions of The 1 bankers' willingness in m e e t i n g farm January short-term to d e p o s i t s more months. number consumers better in r e b u i l d i n g level loan months Practically producing to a d v e r s e l y for loan difficulties next for because three spending significant grains high somewhat conditions agricultural increased have financing. demand requests Although time district buying. preliminary than to b e reported their survey stronger that and a small legislation crop year. TENTH The economy District. This activity, and policy loan ally are there weakness, easing emphasizing an and liquidity cause uncertainties in m o s t substantial combined impact more positions. they CITY parts in c o n t i n u e d investment improved of is is h a v i n g demand - KANSAS buoyancy is r e f l e c t e d This stance, With lacks although sector. DISTRICT the want perceive region monetary commercial which banks are to r e m a i n relative by easing available, portfolios Tenth business variability on d i s t r i c t They the sluggish with funds of to banks. gener- aimed at flexible future be- rate movements. Business activity affected by the aircraft industry, corporations and is have Government still General and has also being or in s k i is such important affected of by Business they by of of by the at rates Junction, Government Kansas Colorado, uranium City slow- severe econis industry. that actions have and Colorado, are Domestic where as planes in C o l o r a d o Government cities -- current the is d e p r e s s e d . of soft the construction recreation increase most in in O k l a h o m a , Business of v a r i o u s been executive experienced Economies as G r a n d curtailment to of long as m u c h outdoor activity because the activity not remains In a d d i t i o n , areas. continues activity. such have a strong Mining down weak. has Employment purchases impact the o t h e r areas better. is the Missouri in W i c h i t a , been affected sustained exploration couraging not because misfortunes Activity from and slowdown. their remain strikes. omic normal curtailed contracts Motors largely economic particularly suffering Nebraska down, current in K a n s a s oil dis- uranium been purchases. mining adversely Since and retail consumer omic sales spending growth in 1 9 7 1 , this m o n t h . Reports discount houses compared with mostly of the disappointing fore Christmas. this the large up ested a of well store that about cent. prices. stores with pre-Christmas used ing any extra campaigns economic efforts said this appointing promotion On were also such reductions stores that not the o t h e r stress continue activities said that on v a l u e had made as this they any many had -- and to sales and inter- to sales due weak sales. they had advertis- to generally just while intensified used are increased whether the good sales promotional stores undertaken had usually caters exhibit the were surprisingly, sales, year be- regional fall special of gains strong asked reported hand, that this post-Christmas sales stores had sales in responsible customers items gains, just One their and as sales again Somewhat gift stores strong price they records -- w i t h sales. Most that year. sales advertising retail earlier slowdown. in D e c e m b e r report promotional or reported Generally, also surveyed luxury stores partly when econ- December the b e s t that to surveyed good stores. reasonable Christmas The said year reported early been had slowdowns before weak that of December, others in have economic customers again generally sales may stores in a clue during while order-department specializes income 10 per at as substantially stores such time department sales that conditions during quality above-average by of in improved this were some having reported mail stores year; After at watched -- w i t h last Generally, a chain in good retail a decline then Weather combination quite large but important closely mixed nature. pattern. controller hold were stores were for district same month several so is b e i n g reporting a modest November, are with special more price dis- Generally, cated that sales than during say popular. that What well supplies, ually are these domestics banks. loan ing Banks demand of banks from to b e policy, term and them. are Some months, explains to and the ways. most that under loan continued models. demand are cautious coming to toward the weak repurchas- loan policy however, In their in shorter- instances, purchasing interest the to s t r e n g t h e n . approach in District they w e r e in be contin- dealers generally, pressure to weeks. Tenth long-term cost short are many funds the seem on they in s o m e recently, likely sales but especially at cars positions. and, upward to b e reacting -- p l a c i n g that not aggressive More of year-earlier to a c o n t i n u e d liquidity the v i e w is for a more cases. until are say at m a n y funds sales subcompacts, is m a k i n g to e a s e municipals, lower the slow prospects cautious renewed in makes traffic 1970 were Foreign blame foreign indi- comparable appears In a d d i t i o n their expressed come achieving sales in s o m e are the district that introductions companies, Funds where, banks in the report interest investable short-term Federal likely ample they dealers continuing fortify investment selling is about holding to are of in D e c e m b e r above some showroom developing continue notes GM dealers Little with were domestic they in s e v e r a l loans appears some demand cars American-made pessimistic Loan new everywhere. out. in a l l p a r t s However, showing success while sold 1969. November one-size-larger, selling dealers new A m e r i c a n through Shoppers dealers of of December 1970 m o d e l s period. auto rates coming This liquidity. partly ELEVENTH DISTRICT The outlook with guarded economists tial optimism in cipate see with cost-push as a and the they as some activity of fifteen While along rate will the m a j o r of currently they and expect some a viewed business substan- decline the m a j o r i t y in also anti- remain fairly high. Moreover, problem facing policy makers the p r i m a r y incomes is academic with inflation, being form 1971 cause policy of the continued is g e n e r a l l y favored solution. real cipate and of DALLAS of District. still pressures -- and half a sample unemployment The economists and first the r a t e inflation inflation by in e c o n o m i c rates that the the E l e v e n t h recovery interest for - GNP in continued a healthy from the strong manufacturers as for in a hedge consumer in s t a t e expect sales assumption no Virtually none tributory factor The to rate believe the either that the respondents unemployment erally feel of current 1971. residential durables (the of steel a possible Most resulting lost during inventories steel anti- construction latter in a u t o m o b i l e s dollar by strike was the m o r e b u l l i s h of local expenditures, only government a mild regarding increase hedging business-fixed the in in s t e e l investment will also respondents while automobile inventories. be a con- recovery. also during rate from A buildup and in b o t h quarters sales against the m o r e b e a r i s h or m a k e and In a d d i t i o n strength rise second performance strike). mentioned. a sharp and of p r o d u c t i o n the G e n e r a l M o t o r s look first recovery a makeup widely expect anticipate the of first half inflation very of little 1971. will moderate change While in they further the gen- over -- the n e x t six m o n t h s , as a c r i t i c a l tinued incomes full-scale ployment it wage rate is c l e a r and problem persistence temporary only it to b e as all funds, the p r i m a r y cipate largely due that with and to the little short- lower in the need in a support unem- inflation makers. 1971 -- policy, but slack expectations declines. f u n d s by that interest of monetary long-term for policy inflationary expected over half con- moderate, long-term first the the inflation facing viewed even though concerned easier of for a few even and is however, and and the citing change rising high problem an a b a t e m e n t for suggest, are more both some accounting Thus, remain the p r i m a r y reasons relatively to situation be necessary controls. to m o v e so — factor Some respondents feel continue for might price the slightly demand inflation. policy and wage-price the m a i n is e x p e c t e d Nearly will and of that consider rates the c u r r e n t But interest a few anti- rates, the F e d e r a l Govern- ment . Opinion jected Some $10-15 express aggravate is a b o u t billion concern evenly Federal that rate stating the d e f i c i t that revenues and With region fared the rest economy of is and to b e regard to problem. sluggish for of the this of the such the y e a r 1970, it the n a t i o n . in p a r t The in m a n y fiscal year in v i e w are shortfall the 1971. tend of pro- to the high unconcerned, in Government circumstances. should showing increase of size will respects, favorable a sharp impact activity, under well, the Others, economic is a r e s u l t on expected unusually reflected Budget a deficit the i n f l a t i o n a r y unemployment divided in be n o t e d that this in comparison with of the district the o u t p u t of crude petroleum cies in the in T e x a s heights. In second and Louisiana turn this industrial production the n a t i o n as resulted decline here, in a n in in increase the p r e c e d i n g than in of the y e a r raised increase a whole. particularly stronger half the region crop as a and record rise in 1970, for conditions following construction office whole. in agen- to a d e c l i n e favorable weather Finally, in a p a r t m e n t s to to a s m a l l contrast production year. the n a t i o n in regulatory allowables contributed Moreover in oil as o i l buildings, a activity was markedly TWELFTH Businessmen a continued situation slow areas, in s o m e areas reports reflection level of of of demand what but prices most much rather buoyant Washington. big count of stores the stores women's below of recent of the were in department last clothing there were furs and fine more reluctant in year's to them, sales. marked season One only the to b e seemed credit. not due least match up to somehigher and the were registered lines the chain cent of difficulty gain such of and in the dis- openings lines, in by of Sunday a lower Even here regional in s a l e s a centers. to h a v e a 1 per There As By r e g i o n , Higher-priced seemed and year. were terms w a s seemed spread did sales Utah; sales. production. in v o l u m e . and this increases experiencing dollar shopping the Buyers on small of retail the p r e v i o u s are report effect Christmas on m e d i u m - p r i c e d declines jewelry. One general, increase stores. reported to b u y in increase due of District industrial In suburban were in in A r i z o n a the of the C h r i s t m a s concentrating based activity. banks increase of the T w e l f t h those years. a real FRANCISCO relatively cutbacks during specializing matching and were sales increases regular-line report loans. Most in the b e h a v i o r for sales retailers in situation, than - SAN in e c o n o m i c further this increases bankers retailers sales Retail the pace is a p p a r e n t In most are and DISTRICT some by the even high-priced in d o l l a r specialties to b e p r i c e - c o n s c i o u s sales as and As greatest has been problems. described as down Delinquencies but yet source not of in out some difficulties in T a c o m a Some smaller increases in and about loans line. support closed in Washington sales 1969 consumer of to and The lumber the local output; for those are industry, economy, the the is s t i l l high retail of were 1968. which has b e e n a experiencing pulp sometime market Seattle-Tacoma sales area somewhat largest until the up is the n a t i o n a l in and to mortgages Overall, to h a v e Seattle-Tacoma equal in m i d - D e c e m b e r producing continues the orders. and and in paper January. have had economy, housing starts sign increas- fallen. The pace ing, and of Orange further County are layoffs its continues doing selling year. for staff. to be On and local farmers are for in U t a h . first supplies hand, have in or in In Northern further steel produc agriculture fruit facilities elec- industrial to a v o i d District A the y e a r . firm copper experienced of areas. of Arizona, The Washington cold-storage in O r e g o n in s o m e in D e c e m b e r the o t h e r well. the and A builders' days no -- p a r t i c u l a r l y California ten shows continuing layoffs strong relatively well Similarly, Southern down activity manufacturers continuing. shut to b e reductions announced of California of industrial larger -- h a v e cutbacks tion of Oregon's tronics age from firms unemployment few Retail in m a i n t a i n i n g mill have the c a s e , crop has are being a better seems been expande than aver The the lower have slower level reported changes in rate of improved their now buying charging has less lowered on rates one year deposits of shifting their search loans for are In port to activity men are plans. does their the new has lower both and not been in b u s i n e s s to been increasing, are this and others in their in a b e t t e r increase and, of the their national CD's and that "saver-type" time shift bankers are or in p o l i c y , consumer although a source to strongly. now active total and lend of sup- Business consequence, investment it loans. rapidly. in are reported aggressive position more on bank rising making CD's More in are increasing its spending, not The begin of they Bankers are rates large and and banks. in banks to a m o r e Despite cautious finally One reflected As part more maturity. remaining banks bonds. policies has Some interest is district positions on s o m e consumer economy, at outstanding loans. business. summary, the their paid lending lower loans municipal are paying activity portfolios. of tax-exempt for liquidity asset average maturity they economic demand the trend, of business- production when demand

Federal Reserve (1971, January 11). Beige Book. Beige Book, Federal Reserve. https://whenthefedspeaks.com/doc/beige_book_19710112

@misc{wtfs_beige_book_19710112,
  author = {Federal Reserve},
  title = {Beige Book},
  year = {1971},
  month = {Jan},
  howpublished = {Beige Book, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/beige_book_19710112},
  note = {Retrieved via When the Fed Speaks corpus}
}