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 May 15, SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS Prepared for the Federal Open Market Committee By the Staff Board of Governors of the Federal Reserve System 1980 TABLE OF CONTENTS Page Industrial production and capacity utilization . . . . . . . . . . . . . . . . . . .. .. Long-term securities markets . Housing starts and permits ERRATA . . . . . . . . . . . . . . . CHART: Capital spending commitments . . . TABLES: Selected financial market quotations Monetary aggregates . . . . . . .. o SUPPLEMENTAL NOTES Industrial production and capacity utilization Industrial production declined 1.9 percent in April, following declines of 0.7 percent in March and 0.2 percent in February. As noted in the Greenbook, large declines occurred in April in output of motor vehicles and parts and of construction supplies, 12.0 percent and 3.4 percent, respectively. However, most of the decline in the overall index was accounted for by widespread reductions among other components. Manufacturers operated at 81.0 percent of capacity in April, down 2.0 percentage points from March. The utilization rate for primary processing industries fell 2.4 percentage points further in April and the rate for advanced processing industries declined 1.7 percentage points. For industrial materials producers, the capacity utilization rate dropped to 82.2 percent from 84.5 percent in March. Long-term Securities Markets A sense of the Senate resolution removing all restrictions on the issuance of tax-exempt mortgage revenue bonds in 1980 was adopted by the Senate Finance Committee on May 14. This move by the Senate committee in effect nullifies the attempt by the House to limit the use of these securities. About $5.0 billion of single-family mortgage revenue bonds have been sold thus far in 1980. Given this development, the pace of issuance could pick up significantly over the remainder of the year. -1- Housing starts and permits Starts of new private houses declined 2.1 percent in April to a seasonally adjusted annual rate of 1.02 million units after a 21.7 percent decline in March to a 1.04 million units rate. Starts of single-family units edged up 1.6 percent to a 625,000 annual rate, while starts of multi-family units declined 7.5 percent to a 394,000 unit rate. Permits for new houses declined 14.2 percent in April to an 800,000 annual rate, with permits for single-family units down 13.2 percent further and permits for multi-family units down 15.5 percent. ERRATA: Part I, page I-21. Line 13, should read "a 10 percent" instead of "an 8 percent". Part II, page II-9. The attached chart on CAPITAL SPENDING COMMITMENTS, with corrected scale, should replace the one in the Greenbook. -3- CAPITAL SPENDING COMMITMENTS Seasonally adjusted Billions of dollars -- K- 30 24 . .. ....... ......... : * - .. .. . . .. .. .. .. . .. . . . . . . . . . . . . . . . .. . . . . .. . . . .. . . . a 18 hinery S12 . ... . ... .... .. .. .... .. .. ... . ... 1977 .. .. 1979 1978 1980 dollars) 16 t L... : : : : : : : : :...... :..: : S.... *.*1977 "° ,' o' '.°' °o o ° .... . . .. :. : : : : : ... : .V:*.* ) .... .:: . . ...-...... $...-..-.. -... ..... .. -.::...--.- 1978 .. .. .. . .... .. .. . . .'.',. ',. °. . .. . . ."o . , ° . . ..1979 .. . ... ... .. ... .. ... .. . ... Nonmachinery : : I::::::::::::: 12 Machinery 1980 .. . ' . . . . . ... °,° -J 12 '8 SELECTED FINANCIAL MARKET QUOTATIONS (Percent) 19791 FOMC Oct. 5 . AKTQOAIN 1980 SEECEFIACA FOMC Early Mar-Apr Jan. High Apr. 22 11 ' 15 May Change from: Early Mar-Apr FOMC Apr. 22 Jan. High Short-term rates Federal funds 2 11.91 13.9& 19.39 17.56 10.85 -3.09 -8.54 -6.71 Treasury bills 3-month 6-month 1-year 10.70 10.63 10.28 11.45 11.50 10.60 16.00 15.64 14.58 12.25 11.78 10.92 8.61 8.72 8.73 -2.84 -2.78 -1.87 -7.39 -6.92 -5.85 -3.64 -3.06 11.73 11.86 11.84 12.93 12.90 12.36 18.00 17.69 17.25 15.90 15.44 14.15 9.18 9.07 8.88 -3.75 -3.83 -3.48 -8.82 -6.72 -8.62 -6.37 -5.27 12.09 12.50 12.80 13.28 13.38 13.36 17.87 18.59 18.47 16.29 15.50 14.55 9.34 9.46 9.54 -3.94 -3.92 -3.82 -8.53 -9.13 -8.93 -6.95 -6.04 -5.01 12.45 12.79 14.59 14.56 19.04 19.60 17.44 17.10 10.49 11.16 -4.10 -3.40 -8.55 -8.44 -6.95 -5.94 13.50 15.25 20.00 19.50 17.50 2.25 -2.50 -2.00 10.01 9.60 9.36 10.62 14.53 11.18 10.51 10.82 10.26 13 65* 12.85* 10.94 9.47 10.31 10.46 -1.15 - .20 .20 -5.06 -3.34 -2.39 -1.71 - .51 - .48 6.64 7.30 9.44 7.89 7.44 .14 -2.00 - .45 Recently offered 10.22 10.25 11.51 11.54 14.22 14.12 12.87 12.69 11.43P 11.6 5 .08 .11 -2.79 -2.47 -1.44 -1.04 Primary conventional mortgages 6 11.35 12.90 16.35 16.35 14.68 1.78 -1.67 -1.67 Commercial paper 1-month 3-month 6-month Large negotiable CDs 3 1-month 3-month 6-month -8.37 -2.19 Eurodollar deposit 2 1-month 3-month Bank prime rate -mediate- and longrates U.S. Treasury (constant maturity) 3-year 10-year 30-year Municipal 4 (Bond Buyer) Corporate Aaa New issue5 Early Jan. Mar-Apr Low FOMC Apr. 22 897.61 63.39 858.96 63.25 759.13 55.30 789.85 58.74 822.53 61.04 -36.43 - 2.21 63.40 5.74 AMEX Composite 235.15 254.45 215.69 245.03 253.44 - 1.01 37.75 8.41 NASDAQ (OTC) 152.29 153.12 124.09 135.71 146.62 - 6.50 22.53 10.91 Stock prices Dow-Jones Industrial NYSE Composite 1. One-day quotes except as noted. 2 Averages for statement week closest to date shown. . FOMC Mar-Apr Apr. 22 Low FOMC Oct. 5 3condary market. ne-day quotes for preceding Thursday. 5. Averages for preceding week. 6. One-day quotes for preceding Friday. *--Highs reached on Feb. 26. May 15 Early Jan. 32.68 2.30 MONETARY AGGREGATES (Based on seasonally adjusted data unless otherwise noted) Q4 ---- Money stock measures 1. M-1A 2. M-1B 3. M-2 4. M-3 8.8 10.1 10.3 10.3 Apr. 1980 1979 Q3 1 Q1 Feb. Mar. p Apr.e Percentage Change at Annual e to Apr. Rates ---- 4.7 5.3 7.2 9.9 5.5 6.0 7.4 8.4 12.2 11.7 10.7 12.6 -3.2 -1.2 3.6 3.4 -18.5 -14.4 -2.8 -0.3 3.8 4.9 7.5 8.5 Selected components 5. Currency 11.1 8.1 6. Demand deposits 8.0 3.4 7. Other checkable deposits, NSA 2 46.7 15.7 8. M-2 minus M-1B (9+10+11+14) 10.4 7.9 9. Overnight RPs and Eurodollars, NSA 3 -4.7 -17.3 10. Money market mutual fund shares, NSA 166.2 120.0 11. Commercial banks 10.7 7.4 12. savings deposits -0.4 -15.1 13. small time deposits 21.5 28.6 14. Thrift institutions 5.3 3.6 15. savings deposits -2.5 -26.0 16. small time deposits 10.4 22.3 17. Large time deposits 9.5 30.3 18. at commercial banks, net 4 2.5 22.6 19. at thrift institutions 72.2 90.8 20. Term RPs, NSA 13.8 5.4 8.7 4.1 20.1 7.9 -1.6 149.9 7.5 -16.8 28.1 -0.5 -22.7 11.7 18.4 10.4 72.6 -15.8 10.1 12.7 0.0 10.4 -4.8 185.7 8.8 -16.1 28.6 -1.5 -28.4 12.4 31.9 27.1 60.2 -27.7 7.8 -7.2 36.4 5.2 -77.4 78.3 4.1 -34.6 34.1 2.8 -29.1 18.9 13.7 12.3 21.5 -85.1 1.1 -26.6 70.6 1.1 -181.0 4.0 11.7 -40.8 49.1 0.6 -40.8 21.1 16.6 14.0 28.2 -4.4 8.8 1.8 33.3 8.3 -21.5 215.6 9.0 -13.3 31.8 2.6 -17.9 16.2 17.9 10.6 88.6 -1.8 --Average Monthly Change in Billions of Dollars-- MEMORANDA: 21. 22. 23. 24. 25. 26. Managed liabilities at commercial banks (22+23) Large time deposits, gross Nondeposit funds Net due to related foreign institutions, NSA Other 5 U.S. government deposits at commercial banks 6 9.5 4.3 5.2 -1.5 2.2 -3.4 7.6 3.2 4.4 13.5 5.9 7.6 5.1 2.5 2.6 -5.4 5.0 -10.4 3.7 2.2 1.5 2.9 2.2 -2.2 -1.2 1.2 3.3 2.4 5.2 2.0 0.7 -4.6 -5.9 0.7 0.8 0.6 -1.1 -0.3 -1.5 -3.9 1.2 0.3 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. onsists of borrowings from other than commercial banks in the form of federal funds purchasei ities sold under agreements to repurchase and other liabilities for borrowed money (includii loans RPs, and other minor items borrowings from the Federal Reserve), loans sold to affiliates, 6. Consists of Treasury demand deposits at commercial banks and Treasury note balances. e--estimated. n.a.--not available. p--preliminary. 

Federal Reserve (1980, May 19). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19800520_part2

@misc{wtfs_greenbook_19800520_part2,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1980},
  month = {May},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19800520_part2},
  note = {Retrieved via When the Fed Speaks corpus}
}