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 this document may contain occasional gaps in the text. These gaps are the result of a redaction process that removed information obtained on a confidential basis. 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 optimal 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. CONFIDENTIAL (FR) CLASS II - FOMC April 18, 1980 SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS Prepared for the Federal Open Market Committee By the Staff Board of Governors of the Federal Reserve System TABLE OF CONTENTS Page THE DOMESTIC NONFINANCIAL ECONOMY Gross national product . . . . . . . . . . Personal income . . . . . . . . . . . . . Housing activity . . . . . . . . . . . . . . . . . . . . . . . TABLES: Gross national product and related items Personal income . . . . . . . . . . . . . New private housing activity . . . . . . Prices for selected commodities . . . . . ADDENDUM: . THE DOMESTIC FINANCIAL ECONOMY TABLES: Monetary aggregates . . . . . . . . . . . . . . . . Commercial bank credit and short- and intermediateterm business credit . . . . .. Selected financial market quotations . . . . .. .. 8 . . . . . . . . . . ..... . . 9 10 SUPPLEMENTAL NOTES Gross National Product Gross national product in the first quarter increased in nominal terms at a 10.7 percent annual rate, about the same as in the preceding quarter, and in real terms at a 1.1 percent annual rate, down from the 2.0 percent rate in the fourth quarter of 1979. GNP prices as measured by the implicit price index increased at a 9.5 percent annual rate in the first quarter of this year, up from an 8.4 percent rate in the preceding quarter. In terms of a fixed-weighted index, gross domestic business product prices are indicated to have risen at an 11.8 percent annual rate, after an 8.4 percent rate of rise in the fourth quarter of last year. Inventories are estimated to have been unchanged in real terms in the first quarter and inventory investment declined from a $1.4 billion annual rate in the fourth quarter to zero in the first quarter. (The total inventory valuation adjustment for the first quarter is -$68.3 billion in annual rate terms.) Final purchases in real terms rose at a 1.5 percent annual rate, down from a 3.6 percent rate in the preceding quarter. The smaller increase in real final purchases reflected a very large decline in residential investment and small declines in consumer expenditures for goods and state and local government purchases of goods and services, which were a little more than offset by another substantial rise in federal government purchases of goods and services, a moderate rise in consumer expenditures for services, and small increases in business fixed investment and in net exports of goods and services (with both exports and imports increasing sharply). The ratio of personal saving to disposable personal income edged down to 3.4 percent in the first quarter from 3.5 percent in the fourth quarter of last year. Personal Income Total personal income rose at a 9 percent annual rate in March, about twice the gain in February. However, the pick-up in March reflec- ted the refund of $2 billion to California employees from their cash sickness program and a number of special factors that had held down income growth in February. Excluding all of these nonrecurring factors, the advance in personal income would have been about the same ($13 billion) in each of the first three months of this year, but significantly below the average monthly gain of $22-3/4 billion in fourth quarter. Wages and salaries rose $8-3/4 billion in March, about the same as in February, as a sharp increase in hourly earnings outweighed, on balance, the decline in aggregate hours. Housing Activity Total private housing starts dropped 22 percent in March to a 1.04 million annual rate--the largest monthly percentage decline in two decades. The March pace was the lowest since April 1975. At 1.2 million units, starts in the first quarter as a whole were off 21 percent from 1979:Q4 and were about 40 percent lower than the quarterly peak in starts in 1978. March--by 18 percent. Total building permits also declined sharply in Single-family permits were off 23 percent and multifamily permits were down 9 percent. Total permits for the first quarter were at the lowest rate since 1975:Q4. The reduced levels of activity continued to be seen in all the major geographic regions of the nation, with activity falling in March in all areas except the Northeast. Starts of single-family homes fell 23 percent in March to 606,000 units--the lowest level in more than 10 years. Multifamily starts were down 20 percent, reversing an increase in February and bringing the 1980:Q1 pace to 13 percent below 1979:Q4. Correction: Pages O-7 and I-11: The 1979-Q4 change in the 4/16/80 estimate of the fixed-weighted price index for gross domestic business product excluding food and energy should read 6.6 percent per year. -4GROSS NATIONAL PRODUCT AND RELATED ITEMS (Percentage Changes at Annual Rates Except as Noted) 1979 1980 Q4 Ql Gross national product Final purchases Private Excluding net exports 2.0 3.6 3.1 3.1 1.1 1.5 0.6 0.3 Personal consumption expenditures Goods Services 4.1 4.7 3.5 1.6 - .8 4.2 Gross private domestic investment Residential investment Business fixed investment Inventory investment -11.6 -4.5 - .31 -5.7 -7.5 -20.1 1.11 -1.4 Net exports of goods and services Exports Imports 0.01 7.0 8.2 0.71 13.6 13.5 Constant (1972) Dollars 6.0 16.0 0.8 5.4 16.2 -0.5 1.1 0.7 10.5 12.2 10.7 10.9 GNP implicit price deflator 8.4 9.5 Gross domestic business product fixedweighted price index Excluding food and energy 8.4 6.6 11.8 8.8 Personal saving rate, current dollars 2 3.52 Government purchases of goods and services Federal State and local Disposable personal income Related Items Gross national product, current dollars Final purchases, current dollars Changes from levels in billions of 1972 dollars. Personal saving as percentage of disposable personal income. 3.4 2 PERSONAL INCOME (Based on seasonally adjusted annual rate data) ___ __ 1979 1978 1979 Q4 1980 Q1 Feb. Mar. - Percentage change, at annual rates 1- - - 9.1 Total personal income Wage and salary disbursements Private 12.9 11.2 12.6 10.7 12.8 14.1 10.1 10.8 10.9 11.1 10.0 11.0 7.8 8.6 8.1 9.1 Nominal disposable personal income Real disposable personal income 12.0 10.4 10.9 13.3 4.5 8.7 .5 1.1 4.2 - Total personal income Wage and salary disbursements Private Manufacturing Other income Transfer payments Less: Personal contributions for social insurance Memorandum: 3 Personal savings rate - n.a. -8.4 n.a. 2 Changes in billions of dollars - - $15.6 $17.8 $16.8 $22.7 $13.7 $7.4 11.5 10.1 3.2 9.7 8.4 2.0 11.7 9.8 2.7 9.0 7.8 2.1 8.4 7.5 2.6 8.8 8.0 1.4 8.1 2.9 11.7 2.0 5.4 2.1 -.9 -1.6 5.6 1.7 .9 4.6 .6 3.5 .7 3.4 .2 3.4 -1.2 n.a. 1. Changes over periods longer than one quarter are measured from final quarter of preceding period to final quarter of period indicated. Changes for quarterly period are compounded rates of changes. 2. Average monthly change. 3. Equals the centered three-month moving average of personal savings as a percentage of the centered three-month moving average of disposable personal income. NEW PRIVATE HOUSING ACTIVITY annual rates, millions of units) adjusted (Seasonally 1979 1980 Annual Q4 All units Permits Starts 1.54 1.75 Single-family units Permits Starts Q11 Jan. Feb. Mar1 1.35 1.59 1.12 1.26 1.26 1.42 1.14 1.33 .94 1.04 0.97 1.19 .82 1.06 .66 .80 .76 1.00 .70 .79 .53 .61 .71 3.74 .62 3.56 n.a. n.a. .59 3.21 .53 2.99 Multifamily units Permits Starts .57 .55 .53 .54 .45 .47 .50 .42 .45 .54 Mobile home shipments .28 .26 .28 .27 Sales New homes Existing homes 1. Preliminary estimates. n.a.--not available. n.a. n.a. n.a. .41 .44 n.a. PRICES FOR SELECTED COMMODITIES (Dollars) 1979 1/ 1/ July Oct. 1/ Jan. Feb. 1980 1/ Mar. 1/ 1 April 8 15 Near-term futures prices for precious metals: Gold Troy oz. 297.60 393.50 712.00 697.50 566.50 498.50 538.50 519.20 Silver Troy oz. 9.36 16.77 46.30 38.00 29.10 14.00 16.47 14.38 Platinum Troy oz. 414.40 540.00 869.40 919.00 873.60 520.00 605.00 601.00 Spot prices of other metals: 1/ Copper Lb. .851 .973 1.130 1.415 1.044 .918 .945 .956 Lead Lb. .585 .605 .500 .510 .500 .480 .465 .465 Zinc Lb. .405 .375 .375 .385 .395 .385 .385 .383 Tin Lb. 7.643 7.782 8.309 8.567 9.085 8.609 8.636 8.693 Weekly Spot price index of major farm commodities (1967=100): 262.0 251.5 246.7 262.6 245.0 230.3 236.0 235.7 Mid-month prices. MONETARY AGGREGATES (Based on seasonally adjusted data unless otherwise noted) 1 1980 1979 Q4 Q3 ---Money stock measures 1. M-1A 2. M-1B 3. M-2 4. M-3 Selected components 5. Currency 6. Demand deposits 7. Other checkable deposits, NSA 2 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. M-2 minus M-1B (9+10+11+14) Overnight RPs and Eurodollars, NSA 3 Money market mutual fund shares, NSA Commercial banks savings deposits small time deposits Thrift institutions savings deposits small time deposits Large time deposits at commercial banks, net 4 at thrift institutions Term RPs, NSA Jan. Feb. Mar. Percentage Change at Annual Rates --- 8.8 10.1 10.3 10.3 4.7 5.3 7.2 9.9 5.5 6.0 7.4 8.4 3.6 4.0 6.8 7.9 12.2 12.0 10.7 12.6 11.1 8.1 8.7 13.6 10.1 7.8 9.3 8.0 46.7 3.4 15.7 4.1 17.6 -0.5 22.2 12.7 0.0 -7.2 29.1 5.6 40.8 7.9 -10.4 -4.7 -17.3 166.2 120.0 7.9 0.0 149.9 7.7 39.8 151.4 10.3 9.6 185.7 5.3 -86.1 80.4 9.2 -6.0 260.1 -3.5 -2.1 3.4 4.1 6.6 7.8 8.8 9.5 7.4 7.5 8.3 8.8 4.1 8.9 -0.4 -15.1 21.5 28.6 5.3 3.6 -2.5 -26.0 10.4 22.3 9.5 30.3 2.5 22.6 72.2 90.8 5.4 13.8 -16.8 28.1 -0.6 -22.7 11.5 19.0 11.2 71.2 -14.5 -12.3 24.6 -4.0 -15.1 2.3 17.0 9.5 63.4 0.0 -16.1 28.6 -1.9 -27.9 11.5 31.9 27.7 60.2 -35.6 -34.6 33.7 2.8 -29.7 19.4 17.9 17.3 14.3 -61.2 -10.8 29.5 3.1 -16.1 16.1 15.8 8.6 87.3 2.6 10.7 -Average MEMORANDA: 21. Managed liabilities at commercial banks (22+23) 22. Large time deposits, gross Nondeposit funds 23. 24. Net due to related foreign institutions, NSA 25. Other 5 26. U.S. government deposits at commercial banks6 Q1 Mar. '79 to Mar. '80 Monthly Change in Billions of Dollars- 9.5 4.3 5.2 -1.5 2.2 -3.7 7.1 3.2 3.9 4.4 1.3 3.1 13.5 5.9 7.6 3.5 2.5 1.0 4.3 1.7 2.6 2.9 2.2 -2.2 -1.4 1.9 2.0 -0.7 3.9 2.4 5.2 4.1 -3.2 1.6 1.0 0.6 -1.0 -0.7 2.9 -1.0 -4.0 0.1 1. Quarterly growth rates are computed on a quarterly average basis. 2. Consists of ATS and NOW balances at all institutions, credit union share draft balances, and demand deposits at mutual savings banks. 3. Overnight and continuing contract RPs issued to the nonbank public by commercial banks, net of amounts held by money market mutual funds, plus overnight Eurodollar deposits issued by Caribbean branches of U.S. member banks to U.S. nonbank customers. 4. Net of large denomination time deposits held by money market mutual funds and thrift institutions. Consists of nondeposit borrowings of commercial banks from nonbank sources, calculated as the of federal funds purchased, security RPs, other liabilities for borrowed money (including rrowings from the Federal Reserve), and loans sold less interbank borrowings. 6. Consists of Treasury demand deposits at commercial banks and Treasury note balances. e--estimated. n.a.-not available. p--preliminary. COMMERCIAL BANK CREDIT AND SHORT- AND INTERMEDIATE-TERM BUSINESS CREDIT (Percentage changes at annual rates, based on seasonally adjusted data) 1 Q3 ---------1. 2. Total loans and investments at banks 2 Investments 3. Treasury securities 4. Other securities 5. Total loans 2 6. Business loans 7. Security loans 8. Real estate loans Total short- and intermediateterm business credit (sum of lines 13,14 and 15) Q1 Jan. 3.4 11.8 8.5 3.5 7.3 -5.9 12.8 4.2 '79 to Mar. '80e 2.1 -3.8r 11.1 6.3 0.6r 12.1 8.3 9.4r 10.0 13.1 4.9r 9.3 18.2 3.4 13.3r 15.7 19.8 4.0r 12.8 22.7 6.0 17.1r 20.5 22.2 7.9r 16.5r -32.8r -19.7 -20.0 -61.0 14.7 14.2 11.9 12.9 13.2 9.2 7.5 5.5 n.a. 6.6 4.6 n.a. -20.0 14.1 n.a. Short- and Intermediate-Term Business Credit -- 25.0 n.a. n.a. 18.0r 22.0 19.5 11.8r 16.6 76.2 53.5 80.5 69.1r 22.8 18.7r 20. 5r -8.5 -3.4 n.a. n.a. 52.3 84.4 n.a. n.a. Business loans net of bankers acceptances1 21.7 6.3 Commercial paper issued by 3 nonfinancial firms 69.7 15.5 13. Sum of lines 11 & 12 25.7 7.0 23.5r 27.6r 14. Finance company loans to business 4 9.4 4.0 n.a. 74.9 4.6 n.a. Total bankers acceptances outstanding 4 15.5r 20.6 n.a. 15. 3.5r -7.7 6.4 12. Mar. e 18.7 3.0r 27.4 11. Feb. e Commercial Bank Credit --------- 8.7 -88.5 Consumer loans 10. Q4 15.8 1.7 Mar. 1980 1979 24.1 81.6 1. Average of Wednesdays for domestic chartered banks and average of current and preceding ends of months for foreign-related institutions. 2. Loans include outstanding amounts of loans reported as sold outright to a bank's own foreign branches, unconsolidated nonbank affiliates of the bank, the bank's holding company (if not a bank), and unconsolidated nonbank subsidiaries of the holding company. verage of Wednesdays. ased on average of current and preceding ends of months. .--estimated. n.a.--not available. -10SELECTED FINANCIAL MARKET QUOTATIONS (percent) Short-term rates Ir te Federal funds 3 13.55 11.91 16.24 19.39 18.35 6.44 2.11 -1.04 Treasury bills 3-month 6-month 1-year 9.63 9.75 9.54 10.70 10.63 10.28 14.62 14.61 13.66 16.00 15.64 14.58 13.50 12.68 11.69 2.80 2.05 1.41 -1.12 -1.93 -1.97 -2.50 -2.96 -2.89 Commercial paper 1-month 3-month 6-month 12.25 12.25 12.00 11.73 11.86 11.84 17.09 17.32 16.79 18.00 17.69 17.25 16.53 15.79 14.46 4.80 3.93 2.62 -. 56 -1.53 -2.33 -1.47 -1.90 -2.79 Large negotiable CDs 1-month 3-month 6-month 12.58 12.64 12.30 12.09 12.50 12.80 17.21 18.00 17.97 17.87 18.59 18.47 16.51 16.00 15.15 4.42 3.50 2.35 -.70 -2.00 -2.82 -1.36 -2.59 -3.32 Eurodollar deposit 3 1-month 3-month 13.78 14.01 12.45 12.79 18.60 18.98 19.04 19.60 18.54 18.54 6.09 5.75 -.06 -. 44 -1.06 Bank prime rate 12.00 13.50 18.50 20.00 20.00 6.50 1.50 0 . Treasury (constant maturity) 3-year 10-year 30-year 8.84 8.14 n.a. 10.01 9.60 9.36 13.68 12.40 12.00 14.53 13.65 12.85 11.66 11.16 10.99 1.65 1.56 1.63 -2.02 -1.24 -1.01 -2.87 -2.49 -1.86 Municipal 5 (Bond Buyer) 7.15 6.64 9.08 9.44 7.89 1.25 -1.19 -1.55 Corporate Aaa New issue 6 Recently offered 10.61 10.52 10.22 10.25 13.95 13.72 14.22 14.12 12.70p 12.53p 2.48 2.28 -1.25 -1.19 -1.52 -1.59 Primary conventional mortgages 7 10.03 11.35 15.40 16.35 16.35 5.00 1974 Low 8 FOMC Oct. 5 FOMC Mar. 18 Intermeeting Low Apr. 17 FOMC Oct. 5 577.60 32.89 58.26 54.87 897.61 63.39 235.15 152.29 801.62 59.09 253.27 138.92 759.98 55.30 215.69 124.09 768.86 57.45 235.19 134.55 -128.75 -5.94 .04 -17.74 -diate- and longates Stock prices Dow-Jones Industrial NYSE Composite AMEX Composite NASDAQ (OTC) 1. 2. 3. 4. 5. 6. 7. 8. -. 50 Statement week averages except where noted. (-'-day quotes except as noted. :ages for statement week closest to date shown. ondary market. One-day quotes for preceding Thursday. Averages for preceding week. One-day quotes for preceding Friday. Calendar week averages. 0 FOMCtermeeing Mar. 18 Low -32.76 -1.64 -18.08 -4.37 8.88 2.15 19.50 10.46 

Federal Reserve (1980, April 21). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19800422_part3

@misc{wtfs_greenbook_19800422_part3,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1980},
  month = {Apr},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19800422_part3},
  note = {Retrieved via When the Fed Speaks corpus}
}