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 6, 1965 SUPPLEMENTAL NOTES The Domestic Economy The unemployment rate, seasonally adjusted, declined further in July, to 4.5 per cent from 4.7 per cent in June and 4.6 per cent in May, continuing its gradual downward trend. rate since October 1957. This is the lowest monthly The jobless rate of teenagers declined signifi- cantly, by nearly a percentage point to 13.2 per cent, reflecting a sharp increase in their employment. The jobless rates of adult men and women also fell, to 3.1 per cent and 4.3 per cent respectively, and the rates for married men and blue collar workers also declined. The unemployed color differential widened, with the rate for nonwhites at 9.1 per cent and the white rate at 3.9 per cent, but the differential was not quite so wide as in July last year. Long-term unemployment declined significantly, to less than 700,000 seasonally adjusted, well below the 1 million level of a year ago. Total civilian employment increased by 650,000 in July to 72.8 million, with all of the gain occurring in the nonagricultural sector. Of this, teenagers contributed 550,000 and adult women the re- mainder, as adult male employment remained unchanged. The civilian labor force also rose sharply, by a half million to 76.2 million. This large gain raised average labor growth so far this year to 1.3 million, about in line with official expectations for 1965. The increase in the teenage labor force accounted for all of the July increase in the total labor force and half of the July 1964-July 1965 total gain of 2.2 million. The book value of business inventories increased $575 million in June, according to preliminary figures, and, as a result of a fairly typical large upward revision, the May rise now totals $630 million (instead of about $400 million reported a month ago). For the second quarter as a whole, inventory accumulation averaged $685 million per month, as compared with $763 million in the first quarter. However, the second quarter average is subject to change when June figures are revised. June figures show a moderately higher rate of accumulation at manufacturers--and a lower rate at distributors--than in May. The book value of wholesale stocks, which had been increasing sharply, was about unchanged in June. At retail stores, inventory accumulation had been small in May when sales showed a spurt; in June, the rate of accumulation picked up although it remained below earlier highs. The rise in retail inventories in June was mainly at auto dealers and general merchandise stores. Seasonally adjusted new construction expenditures changed little in July. Both private residential and public construction out- lays held at the improved June rate while expenditures for business construction edged to a new high and continued appreciably above a year earlier. June figures were revised upward by 2 per cent, with all major groups sharing in the upward revision. NEW CONSTRUCTION PUT IN PLACE 1/ July Total Per cent change from July 1964 Q II av. $69.2 2 4 Private Residential Nonresidential Business 48.9 27.3 21.6 16.0 2 1 3 4 6 3 10 16 Public 20.3 1 1/ Seasonally adjusted annual rate; preliminary. Domestic Financial Situation The Treasury's August refunding was successful despite weakness which developed in the Treasury bond market and minimal dealer participation. Preliminary figures indicate exchanges by public holders totaling $2.1 billion for the new 18-month notes and around $0.8 billion for the reopened 4's of February 1969. Attrition on public holdings was about 8 per cent. Erratum The attached table should be substituted for III - 14 and related changes made in text. Higher profits estimates shown here for calendar 1965 would raise fiscal 1966 corporate and total receipts shown before by about .6 billion and lower the deficit correspondingly. Rev- enue estimates subject to revision pending release of revised national income series. Corrected August 6, 1965 III - 14 THE FEDERAL BUDGET PROJECTED (Fiscal years. In billions of dollars) 1964 tual 1965 1966 _ Jan. Buyd. Jan. Budi Actual Doc Actual c 1/ -_ Doc FRB IZF Cash receipts Cash payments Surplus (+) or deficit (-) 115.5 120.3 - 4.8 117.4 121.4 - 4.0 119.7 122.4 - 2.7 127.4 - 3.9 125.8 130.1 - 4.3 Cash receipts Withheld income taxes Other individual inc. tax Corp. income tax Excise & highway tax Soc. Sec. receipts Repayments Other receipts Refunds 115.5 39.3 15.3 24.3 14.0 21.9 1.7 6.2 7.1 117.4 36.2 15.3 26.4 14.6 21.8 1.9 6.9 5.8 119.7 36.8 16.8 26.1 14.8 22.1 2.1 7.0 6.0 123.5 38.4 14.9 28.4 14.0 23.9 1.9 8.4 6.4 125.8 39.9 15.5 28.6 13.3 24.6 1.9 8.4 6.4 Cash payments National defense International affairs& finance Space Agriculture Natural resources Commerce & transportation Housing & community develop. Health, labor & welfare Education Veterans Interest Deposit fund accounts Civil service Clearing account General Govt. 120.3 121.4 52.8 2.2 4.9 6.1 2.8 7.4 - .2 28.9 1.5 122.4 50.8 127.4 52.5 2.8 5.1 5.5 54.5 2.0 4.2 7.3 2.6 6.5 1.7 27.3 1.3 6.1 6.0 8.0 - .6 -2.0 - .9 2.2 8.5 .1 -2.1 .2 2.5 123.5 2.9 5.1 7.1 2.7 7.5 .9 28.3 1.5 6.1 8.7 - .2 -2.1 .9 2.3 130.1 3/ 53.3 2.7 5.1 6.5 2.9 6.5 1.2 2.9 6.5 .7 34.1 2.6 5.1 8.8 34.2 2.6 5.1 8.8 * * -2.1 - .1 3.5 -2.1 - .1 2.9 Income assumptions--calendar years (in billions of dollars) I 963 GNP Corporate profits Personal income 583.9 51.3 464.1 I 1 1 1965 19641 Bud. Doc.i FRB 622.6 57.6 491.4 660.0 61.0 520.0 661.0 64.0 524.0 1 966 Ist half FRB 686.0 65.0 540.0 * Less than $50 million. I/ Reflects President's original proposed reduction of $1.75 billion in excise taxes. 2/ Reflects President's recent proposed reduction of $4.0 billion in excise taxes. 3/ Includes $800 million for pay increase. NOTE: Revenue estimates subject to revision pending release of revised national income series. 

Federal Reserve (1965, August 9). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19650810_part3

@misc{wtfs_greenbook_19650810_part3,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1965},
  month = {Aug},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19650810_part3},
  note = {Retrieved via When the Fed Speaks corpus}
}