Greenbook/Tealbook

Prefatory Note The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act. 1 In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing). 2 A two-step process was used. An advanced optical character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff. Content last modified 6/05/2009. CONFIDENTIAL (FR) SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS Prepared for the Federal Open Market Committee By the Staff Board of Governors of the Federal Reserve System August 14, 1964. SUPPLEMENTAL MOTES The Domestic Economy Gross national product in the second quarter is now estimated at $618.6 billion, seasonally adjusted annual rate, according to revised Commerce estimates. August 18) (Confidential until released Tuesday, These estimates,shown in the following table, are virtually the same as those of a month earlier. The major difference is the sizable increase in the figure for inventory accumulation. According to the Commerce preliminary estimate, corporate profits before tax in the second quarter were $57.4 billion, seasonally adjusted annual rate, $800 million higher than in the first quarter. On an income and product basis, total government receipts in the second quarter are estimated at a seasonally adjusted annual rate of $180.2 billion and total expenditures at $187.1 billion. Thus, the annual rate of government expenditures exceeded receipts by $6.9 billion; in the first quarter, receipts and expenditures were in balance. For the Federal Government alone expenditures in the second quarter exceeded receipts by $9.2 billion, as compared with $2.4 billion in the first quarter. effect of the tax cut. The increase resulted from the full State and local government expenditures were less than receipts by an annual rate of $2.3 billion in the second quarter and by $2.4 billion in the first quarter. -2- CONFIDENTIAL until released 8/18/64 GROSS NATIONAL PRODUCT (Seasonally adjusted at annual rates) Billions of dollars 1964 2nd Qtr. 1st Qtr. GROSS NATIONAL PRODUCT 618.6 608.8 Final sales 614.9 606.4 Personal Consumption Expenditures Durable goods Nondurable goods 396.1 57.0 175.3 390.0 55.9 172.9 163.8 161.1 Services Gross Private Domestic Investment Residential construction, nonfarm Other construction Producers' durable equipment Change in inventories Nonfarm 87.2 26.2 22.7 34.6 3.7 3.4 85.9 26.9 22.3 34.2 2.5 2.2 Net exports of Goods and Services Exports Imports 5.7 33.7 27.9 7.7 34.5 26.8 Government Purchases of Goods and Services 129.6 125.2 67.1 64.3 57.0 10.1 54.0 10.3 62.5 60.9 GROSS NATIONAL PRODUCT -- 1954 PRICES 513.5 508.0 PERSONAL INCOME Disposable personal income Saving/disposable income (per cent) 487.9 431.3 8.2 480.9 419.5 7.0 Federal Government National defense Other, net of sales State and local government Corporate Profits Before Tax 57.4p 56.6 GOVERNMENT SURPLUS (+) OR DEFICIT (-) National Income Basis Federal State and local -6 .9 p -9 .2p 2.3p .0 -2.4 2.4 *--For earlier data see Table I - T-2 from FOMC notes for July 22, 1964. Industrial production continued to rise in July, the eighth consecutive increase since November 1963. At 132.7 per cent, the index was 1 point above June and 5-1/2 per cent above a year earlier. Increases were shown by nearly all major groups of industries. Among final products, consumer goods output rose further in July and was also 5-1/2 per cent above a year ago. were widespread among consumer goods. expanded The gains in output Production of business equipment further, reflecting increases in industrial and commercial machinery, and was 9 per cant above a year earlier. Output of materials also rose in July with increases in iron and steel, construction materials, and most nondurable materials. INDUSTRIAL PRODUCTION Seasonally Adjusted 1957-59=100 Per cent change from pJuly 1964 Total Month ago I Year ago I Nov. 1963 132.7 + .8 + 5.6 +4.4 132.3 131.9 + .5 +1.1 + 5.3 + 6.7 +4.3 +4.8 129.3 - .1 + 4.0 +4.2 Business equipment 140.5 +1.0 + 9.1 +6.4 Materials Consumer goods Home goods & apparel Staples 133.1 +1.1 + 5.7 +6.0 Durables 132.2 +1.1 + 6.2 +7.9 Nondurables 134.1 + .8 +11.8 +9.5 Nonfarm payroll employment increased 140,000 in July, and May and June figures have been revised upward to show a rise of 250,000 for those two months (preliminary data had indicated a rise of only 165,000 from April to June). At 58.9 million, seasonally adjusted, nonfarm employment in July was 1.55 million above a year earlier. As in earlier months, most of the July increase was outside the A 20,000 advance in manufacturing employment was industrial sector. in durable goods industries. Primary metals increased 18,000, while transportation equipment, employment declined 14,000 and was 30,000 In the nonindustrial sector, the increase was below the April level. concentrated in the service industry where employment rose by 56,000. Further gains were also recorded in trade and finance. State and local government employment declined somewhat following steady gains in earlier months. The average workweek, seasonally adjusted, in manufacturing industries continued at 40.6 hours, unchanged from June and 0.2 hours longer than a year earlier. Average hourly earnings were $2.53, or at the level maintained since April, and 3.3 per cent higher than a year earlier. Average weekly earnings, at $103 were down less than seasonally from the June high and were 3.8 per cent above a year earlier. Wholesale prices advanced 0.4 per cent in July, but remained below a year earlier. Major price movements in July included a sub- stantial rise in livestock and meat prices and significant increases in fuels and metals prices. A variety of other industrial products advanced moderately. WHOLESALE PRICES (1957-59=100) Per cent change from July 1964 Total Farm products & foods Other commodities June 1964 I July 1963 100.4 +0.4 -0.2 98.1 101.1 +1.0 +0.2 -1.7 +0.3 The Domestic Financial Situation Turnover of demand deposits at 343 centers outside New York increased to 35.5 (preliminary) in July from 35.0 in June. Over the past four months turnover has averaged 3.5 per cent above the first quarter of 1964 and 6.6 per cent above the April-July period last year. Turnover had begun to increase in April this year after having shown little net change since July 1963. Yields on corporate bonds--both new and outstanding--increased slightly last week. Adjusted to an Aaa basis, an August 12 utility issue was priced to yield 4.39, up 2 basis points from relevant July offerings. Moody's Aaa series for outstanding bonds rose 1 basis point to 4.42. Stock prices recovered further from the drop associated with the Vietnam crisis and are now only 2 per cent below their July peak, International Developments The preliminary figures for the outflow of short-term capital in June have been revised downward because of the correction of a reporting error and the receipt of some additional information. The corrected total outflow of $223 million was about equally divided between bank credit and movements of liquid funds. Japanese trade figures for July show a further diminution of the trade deficit. The deficit was about half as large as the peak monthly average deficit of the first quarter; imports have shown little net change while exports have risen by nearly one-sixth. 

Federal Reserve (1964, August 17). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19640818_part3

@misc{wtfs_greenbook_19640818_part3,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1964},
  month = {Aug},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19640818_part3},
  note = {Retrieved via When the Fed Speaks corpus}
}