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 September 12, 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 THE DOMESTIC NONFINANCIAL ECONOMY Retail sales . . . . . . . . . . . . . . . . . . . . . .. Business inventories . . . . . . . . . . . . . . . ..... . 1 . 1 TABLES: Retail sales . . . . . . . . . . . . . . . ..... .. 3 . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . 4 Commercial bank credit and short- and intermediateterm business credit . . . . . . . . . . . . . . . 5 . . . . . . . 6 . . . . . . . . 7 Business inventories Inventory/sales ratios THE DOMESTIC FINANCIAL ECONOMY TABLES: Monetary aggregates . . . . . . . . . . Selected financial market quotations SUPPLEMENTAL NOTES Retail sales Sales at retail stores rose 1.5 percent in August, according to advance, partial-sample estimates; new data indicate increases of 3.1 percent in July and 1.9 percent in June, both appreciably more than shown a month ago. Sales of all retail stores in August were 5-3/4 percent above the monthly average in the second quarter. Sales by automotive dealers, which rose 2-3/4 percent in August following a 12-3/4 percent jump in July, accounted for about a third of the Ex- August overall increase and two thirds of the total June rise. cluding sales at automotive stores and places selling building materials, hardware, garden supplies, and mobile homes, sales advanced 1.2 percent in August, after a 1.3 percent rise in July; sales at these stores in August were 3.4 percent above the monthly average in the second quarter Sales at general merchandise stores and at apparel and accessory stores rose even more sharply in August than they had in July; sales at furniture, home furnishings, and equipment stores rose moderately in August after a surge in July. Business inventories The book value of inventories held by manufacturing and trade establishments increased at a $43.7 billion annual rate in July, up from the $7.7 billion rate rise in June and the $34.5 billion rate accumulation in the second quarter as a whole. The July rise in stocks was accompanied by a 2.9 percent increase in total sales and shipments, and the ratio of all inventories to sales for these businesses declined to 1.49 from 1.52 in June. -2- Retail trade inventories rose at a $15-1/4 billion annual rate in book value terms in July, following a liquidation at a $3 billion annual rate over the preceding two months and accumulation in the second quarter as a whole at a $2.7 billion rate. Nearly all the accumulation in July was in nondurable goods, with relatively large increases widespread. Despite the large rise in retail trade inventories in July, the surge in sales at retail stores that month resulted in the ratio of inventories to sales edging down further from the April-May peak to 1.42. RETAIL SALES (Percentage change from previous period; based on seasonally adjusted data) 1979 Q_4 Total sales Q1_ 2.0 2.1 -. 4 -1.2 Total, less auto and nonconsumption items 3.5 2.6 GAF 2 1.7 -. 1 -1.5 -3.0 (Real) 1 Durable Auto Furniture & appliances Nondurable Apparel Food General merchandise 3 Gasoline Q2 -3.6 1980 Aug. /Q2 June 5.8 -5.7 -1.5 3.1 Aug. 1.5 2.5 3.4 1.4 1.3 1.2 -1.6 4.0 -. 7 2.2 1.6 .8 1.5 -12.0 -16.6 12.6 18.9 3.0 4.9 8.3 12.8 2.4 2.8 -1.1 1.0 -4.6 6.1 -. 7 5.8 .4 3.9 2.8 1.4 2.3 -1.2 9.2 .6 1.0 1.8 -1.4 5.1 2.8 3.5 2.9 3.5 5.0 1.4 1.5 1.8 -1.5 4.3 -. 7 3.3 3.7 7.7 .2 1.9 July 1. BCD series 59. Data are available approximately 3 weeks following the CPI release. 2. General merchandise, apparel, and furniture and appliance stores. 3. General merchandise excludes mail-order nonstores; mail-order sales are also excluded in the GAF composite sales summary. BUSINESS INVENTORIES (Change at annual rates in seasonally adjusted book value; billions of dollars) -- -Q1 Manufacturing and trade Manufacturing Trade, total Wholesale Retail Durable Auto Nondurable 51.2 30.2 21.0 13.2 7.8 6.2 3.9 1.6 ------- -- --- U 1979 Q4 Q2 Q3 56.5 35.0 21.5 4.7 16.8 11.1 9.1 5.8 47.3 28.3 19.0 12.6 6.4 -1.4 -3.7 7.8 33.2 25.8 7.5 6.1 1.4 -3.9 -4.7 5.3 -*-Y Q1 46.1 41.1 5.0 7.2 -2.1 -3.2 -5.3 1.1 ' ------1980 -- Q2(r) June(r) July(p) 30.8 20.4 10.4 7.7 2.7 -2.5 -4.1 5.2 7.7 2.7 5.0 5.8 -. 8 -1.8 -3.5 .9 43.7 10.9 32.8 17.5 15.3 1.0 -. 6 14.3 Totals may not add due to rounding. r = revised p = preliminary INVENTORY/SALES RATIOS 1979 Manufacturing and trade Manufacturing Trade, total Wholesale Retail r = revised p = preliminary 1980 Q1 Q2 Q3 Q4~ Q1 1.41 1.49 1.34 1.23 1.45 1.44 1.55 1.34 1.18 1.50 1.43 1.55 1.31 1.17 1.46 1.42 1.57 1.29 1.15 1.44 1.42 1.57 1.27 1.15 1.40 Q) 1.52 1.71 1.34 1.22 1.46 June r) July( p 1.52 1.72 1.33 1.22 1.44 1.49 1.68 1.31 1.21 1.42 COMMERCIAL BANK CREDIT AND SHORT- AND INTERMEDIATE-TERM BUSINESS CREDIT (Percentage changes at annual rates, based on seasonally adjusted data)1 1979 Q4 1980 Q1 Q2 June July Aug.e Aug. '79 to Aug. '8 0 e ---------- Commercial Bank Credit ------------1. 2. Total loans and investments at banks 2 Treasury securities 4. Other securities 11.5 -4.4 -2.8r 7.6r 17.lr 6.6r 3.5 7.3 11.0 17.1 26.1r 24.0r 11.3r -5.9 3.0 10.6 30.4 47.0r 40.5r 10.7r 8.3 9.4 11.2 10.8 16.1 15.9 11.6 3.4 12.8 -9.5r -9.5r 1.1r 14.7r 5.0r 20.9r 7.5r Investments 3. 5. 3.4 Total loans 2 6. Business loans 6.0 16.4 -9.1r -8.0r 2.0 7. Security loans -88.5 -32.8 -23.8r 0.Or -60.8r 64.0 8. Real estate loans 14.2 11.9 1.0 9. Consumer loans 5.5 3.7 -21.5 -14.4 n.a. - 10. 11. 12. Total short- and intermediateterm business credit (sum of lines 13,14 and 15) Business loans net of bankers acceptancesl Commercial paper issued by nonfinancial firms3 -1.9 -25.6 n.a. Short- and Intermediate-Term Business Credit - 6.4 22.0 1.2 6.3 17.6 -10.5 -10.3 15.5 76.2 86.9 87.7 13. Sum of lines 11 & 12 7.0 23.1 -0.2 14. Finance company loans to business 4 4.0 -2.8 -4.0 -6.9 Total bankers acceptances outstanding 4 4.6 54.1 33.9 39.4 15. -31.3 1.5 2.4r n.a. 0.Or 22.0r 16.9 2.2r 15.7 -41.7 n.a. 7.3r 53.3 13.0r 11.4 n.a. n.a. n.a. n.a. 1. Average of Wednesdays for domestic chartered banks and average of current and preced- ing 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. SAverage of Wednesdays. Based on average of current and preceding ends of months. e--estimated. n.a.--not available. r--revised. MONETARY AGGREGATES (Based on seasonally adjusted data unless otherwise noted) 1 1980 1979 Q1 Q4 Q2 June July Aug. Aug. '79 to Aug. '80 ---- Percentage change at annual rates --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. M-2 minus M-1B (9+10+11+14) 9. Overnight RPs and Eurodollars, NSA 3 10. Money market mutual fund shares, NSA 11. Commercial banks 12. savings deposits 13. small time deposits 14. Thrift institutions 15. savings deposits 16. small time deposits 17. Large time deposits 18 at commercial banks, net 4 19. at thrift institutions 20. Term RPs, NSA 4.5 5.0 7.1 9.1 4.8 5.9 7.2 7.8 -3.9 -2.4 5.5 5.7 11.4 14.6 18.1 13.4 7.8 11.1 17.7 13.4 19.6 21.9 14.2 13.6 4.3 5.7 9.1 9.3 8.5 2.9 12.6 7.8 -33.1 120.0 8.6 -16.5 32.1 3.7 -26.0 22.3 28.3 20.2 90.8 -16.0 8.3 3.4 29.3 7.7 -7.5 151.9 6.9 -19.3 29.1 -0.3 -22.5 12.0 17.8 9.9 72.6 -31.9 7.0 -8.3 31.8 8.1 -72.0 82.7 9.8 -22.6 33.9 3.7 -27.1 19.3 10.6 7.4 28.9 -19.4 9.8 12.1 78.3 19.3 67.6 132.9 10.9 32.9 -3.1 11.4 23.7 6.0 -22.0 -25.9 0.0 44.3 10.8 6.0 73.5 19.9 192.0 103.5 13.5 38.6 -3.1 8.9 37.6 -3.8 -20.8 -26.5 10.0 51.2 15.0 22.0 63.5 11.7 82.8 1.5 10.7 26.5 0.0 10.7 29.5 1.6 -0.5 -3.2 9.9 98.3 9.4 2.3 37.7 10.3 -2.4 158.7 9.3 -8.0 25.6 4.2 -12.8 15.0 12.3 6.2 59.4 -1.6 -Average MEMORANDA: 21. Managed liabilities at commercial banks (22+23) 22. Large time deposits, gross 23. Nondeposit funds 24. Net due to related foreign institutions, NSA 25. Other 5 26. U.S. government deposits at commercial banks6 monthly change in billions of dollars- -1.9 2.0 -3.9 8.0 3.1 4.9 -6.6 0.0 -6.6 -11.3 -5.0 -6.3 -4.9 -3.9 -1.0 -1.5 0.3 -1.8 0.0 1.5 -1.5 -2.5 -1.4 1.6 3.3 -6.0 -0.5 -8.4 2.1 -4.1 4.0 -1.8 0.0 -2.0 0.5 -1.0 -0.2 0.3 -0.8 2.1 0.9 -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. 5. Consists of borrowings from other than commercial banks in the form of federal funds purchased securities sold under agreements to repurchase and other liabilities for borrowed money (includir borrowings from the Federal Reserve), loans sold to affiliates, loans RPs, and other minor items. 6. Consists of Treasury demand deposits at commercial banks and Treasury note balances. SELECTED FINANCIAL MARKET QUOTATIONS1 (Percent) 1979 FOMC Oct. 5 1980 Mar-Apr Mid-June** Low High I FOMC Aug. 12 Change from: Mar-Apr Mid-June FOMC Aug. 12 Low Sept.11 High Short-term rates Federal funds 2 11.91 19.39 8.99 8.85 10.22 -9.17 1.23 1.37 Treasury bills 3-month 6-month 1-year 10.70 10.63 10.28 16.00 15.64 14.58 6.18 6.60 7.b0 8.64 8.89 8.91 10.14 10.38 3.96 3.78 10.24 -5.86 -5.26 -4.34 1.50 1.49 1.33 11.73 18.00 17.69 17.25 7.98 7.78 7.59 9.08 9.17 9.23 10.51 10.67 -7.49 -7.02 1.43 1.50 10.75 -6.50 2.53 2.89 3.16 7.96 7.90 9.26 9.51 9.84 10.46 10.85 11.28 -7.41 -7.74 -7.19 2.50 12.80 17.87 18.59 18.47 3.62 1.20 1.34 1.44 2 Eurodollar deposit 1-month 3-month 12.45 12.79 19.04 19.60 8.88 8.99 9.70 10.33 10.74 11.48 -8.30 -8.12 1.86 2.49 1.04 1.15 Bank prime rate 13.50 20.00 12.00 11.00 12.00 -8.00 0 1.00 10.01 14.53 13.65* 12.85* 8.56 9.47 9.49 10.16 10.98 11.01 11.27 11.32 11.15 -3.26 2.71 1.11 9.60 9.36 -2.33 1.85 -1.70 1.66 .34 .14 6.64 9.44 7.44 8.61 8.78 -.66 1.34 Corporate Aaa 5 New issue Recently offered 10.22 10.25 14.22 14.12 10.53 10.79 12.03 12.10 12 .2 5p 12.41p -1.97 -1.71 1.72 1.62 Primary conventional 6 mortgages 11.35 16.35 12.35 12.25 13.03 -3.32 FOMC Aug. 12 Sept. 11 Commercial paper 1-month 3-month 6-month 3 Large negotiable CDs 1-month 3-month 6-month 11.86 11.84 12.09 12.50 7.66 3.24 2.95 1.52 Intermediate- and longterm rates U.S. Treasury (constant maturity) 3-year 10-year 30-year Municipal 4 (Bond Buyer) FOMC Oct. 5 Mar-Apr Mid-June High Low Stock Prices 952.39 881.91 897.61 759.13 Dow-Jones Industrial 66.36 70.92 NYSE Composite 63.39 55.30 297.60 318.96 235.15 215.69 AMEX Composite 176.62 159.18 152,29 124.09 NASDAQ (OTC) 1. One-day quotes except as noted. 2. Averages for statement week closest to date shown. 3. Secondary market. 4. One-day quotes for preceding Thursday. 5. Averages for preceding week. 6. One-day quotes for preceding Friday. Highs reached on February 26. H-**- Most lows occurred on or around June 13. p-- preliminary. 941.30 72.64 339.99 188.16 .68 Mar-Apr Mid-June FOMC Aug. 12 High Low 182.17 17.34 124.30 64.07 59.39 6.28 42.39 28.98 -11.09 1.72 21.03 11.54 

Federal Reserve (1980, September 15). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19800916_part1

@misc{wtfs_greenbook_19800916_part1,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1980},
  month = {Sep},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19800916_part1},
  note = {Retrieved via When the Fed Speaks corpus}
}