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 July 2, 1981 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 Employment developments . . . . . . . . . . . . . . . . . TABLES: Changes in Employment . . . . . . . . . . . . . . . . . Selected Unemployment Rates . . . . . . . . . . . . . . Hourly Earnings Index . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . 5 Erratum: THE DOMESTIC FINANCIAL ECONOMY TABLES: Selected Financial Market Quotations . . . . . . . . . 3 4 SUPPLEMENTAL NOTES Employment developments Total employment dropped sharply in June. As indicated by the household survey, total employment fell 843,000 to slightly below the March level. The civilian labor force is indicated to have declined 1,230,000 in June--also to about the March level. With these changes, the unemployment rate declined to 7.3 percent--the rate prevailing for February through April. The decline in the unemployment was concentrated in the 20-24-year-old males, reversing the increase in the rate for this sector for May. According to BLS, "the April-June movements may be a reflection of an earlier-than-usual summer labor force entrance among college students, for which the seasonal adjustment process was unable to account fully." A sizable decline also occurred in June in unemploy- ment of women 25 to 54 years old, reversing the rise in the preceding month. Total nonagricultural payroll employment adjusted for changes in workers on strike dropped 143,000 in June, after rising 103,000 in May and 228,000 in April. (These establishment survey data reflect revisions based on March 1980 benchmarks and updated seasonal adjustment factors.) Before strike adjustment, total nonfarm employment was about unchanged in June, following increases of 72,000 in May and 111,000 in April. State and local government employment fell 110,000 further in June; employment in contract construction declined almost 60,000 (43,000 strike adjusted) further to its July 1980 low, and jobs in retail trade declined 30,000. Employment in mining increased 150,000, as striking workers returned to work. In manufacturing, total employment was about unchanged, but the workweek declined 0.2 hour to 40.1 hours. Wages, as measured by the average hourly index, rose at a 5-1/4 percent annual rate in June, according to the preliminary estimates. From January through May this measure of wage change had increased at about a 7-1/2 percent annual rate. (January wages had been boosted by the increase in minimum wages; from December through May, the index for all private nonfarm production workers rose at a 9-1/4 percent rate). Over 1980 as a whole, the index rose 9-1/2 percent. The easing in the rate of increase in this index this year has been most pronounced in manufacturing, where the rise has been at a 9-1/2 percent annual rate, down from an increase of almost 11 percent over 1980. CHANGES IN EMPLOYMENT 1 (Thousands of employees; based on seasonally adjusted data) 1979 1980 1980 Q4 Q1 Q2 1981 May June -Average monthly changesNonfarm payroll employment 2 Strike adjusted Manufacturing Durable Nondurable Construction Trade Finance and services 170 176 34 28 163 136 133 130 56 83 72 103 -14 -143 -5 1 -6 15 30 84 -58 -47 -12 -12 12 79 38 36 2 8 7 82 5 7 -2 10 55 57 71 53 19 -51 15 71 81 45 36 -96 78 67 -8 5 -13 -59 -33 19 Private nonfarm production workers Manufacturing production workers 103 -9 100 98 99 72 71 -16 -67 22 5 63 68 7 Total employment 3 Nonagricultural 172 174 -42 -48 34 36 377 416 -7 -3 259 369 -843 -755 1. Average change from final month of preceding period to final month of period indicated. These figures are revised to reflect new seasonal factors and the 1980 benchmark to the establishment survey data. 2. Survey of establishments. Strike-adjusted data noted. 3. Survey of households. SELECTED UNEMPLOYMENT RATES (Percent; based on seasonally adjusted data) 1979 Total, 16 years and older 1980 1981 1980 Q4 Q1 Q2 May June 5.8 7.1 7.5 7.4 7.4 7.6 7.3 Teenagers 16.1 20-24 years old 9.0 Men, 25 years and older 3.3 Women, 25 years and older 4.8 17.7 11.5 4.7 5.5 18.3 12.1 5.0 5.9 19.1 11.8 4.8 5.8 19.2 12.4 4.8 5.7 19.5 12.9 4.8 5.9 19.0 12.1 5.0 5.6 White Black and other 5.1 11.3 6.3 13.2 6.6 14.1 6.6 13.2 6.5 13.7 6.8 13.6 6.4 14.2 Fulltime workers 5.3 6.8 7.3 7.1 7.1 7.3 7.0 White collar Blue collar 3.3 6.9 3.7 10.0 3.9 10.7 3.9 10.0 4.0 9.8 4.1 10.0 3.8 9.8 -4- HOURLY EARNINGS INDEX 1 (Percent change at annual rates; based on seasonally adjusted data) 2 Total private nonfarm Manufacturing Durable Nondurable Contract construction Transportation and public utilities Total trade Services 1979 1980 Q1 Q2 1981 May June 8.0 9.6 10.6 7.1 8.1 5.3 8.7 8.6 8.8 6.7 10.9 11.6 9.8 7.6 9.9 9.4 9.1 9.2 8.9 9.4 9.7 4.4 6.8 7.1 6.2 3.2 5.8 5.3 6.6 6.8 8.9 7.5 7.7 9.4 8.8 9.5 9.4 11.8 9.8 9.6 5.1 8.6 9.9 9.0 9.7 4.2 3.0 9.1 1. Excludes the effect of interindustry shifts in employment and fluctuations in overtime pay in manufacturing. These figures are revised to reflect new seasonal factors and the 1980 benchmark to the establishment survey data. 2. Changes over periods longer than one quarter are measured from final quarter of preceding period to final quarter of period indicated. Quarterly changes are at compound rates; monthly changes are not compounded. Erratum: Part II, Page II-17. omitted. Several lines of last paragraph were The paragraph should read as follows: Retail energy prices have risen only slightly on average since March, as decreases for petroleum products largely offset higher natural gas and electricity rates. Gasoline prices fell about 1-1/2 percent per month in April and May, and industry sources indicate that these prices dropped further in June. The lower retail gasoline and fuel oil prices reflect continued softness in petroleum markets. Reduced domestic consumption, coupled with a high level of production by Saudi Arabia, has put downward pressure on both international and domestic crude prices and has led to a number of price reductions both by producers and by refiners. In contrast, prices for electricity and natural gas--where ongoing decontrol continues to be an important factor--moved sharply higher in both April and May. -6- New data are not yet available for updating the tables on monetary aggregates and on commercial bank credit and business credit, usually carried in the Supplement. SELECTED FINANCIAL MARKET QUOTATIONS 1 (Percent) 1981 July 1 Change from: Early FOMC May May 18 High 18.89 18.84 -.07 -.05 17.01 15.83 14.85 16.20 15.13 14.08 14.65 14.30 13.51 -2.36 -1.53 -1.34 -1.55 -.83 12.62 12.48 12.19 18.57 18.29 17.38 17.86 17.65 16.59 17.37 16.46 15.42 -1.20 -1.83 -1.96 -.49 -1.19 -1.17 21.29 20.90 19.19 12.94 12.99 12.94 18.80 19.01 18.50 18.11 18.29 17.42 17.53 17.28 16.66 -1.27 -1.73 -1.84 -.58 -1.01 -.76 Eurodollar deposits 2 1-month 3-month 22.54 21.36 13.84 14.31 19.39 19.56 18.94 19.08 18.40 18.01 -.99 -1.55, -.54 -1.07 Bank prime rate 21.50 17.00* 19.00 19.50 20.00 1.00 U.S. Treasury (constant maturity) 3-year 10-year 30-year 14.41 13.57 13.17 12.85 12.58 12.16 15.69 14.69 14.11 14.71 13.80 13.31 14.70 14.04 13.47 -.99 -.65 -.64 -.01 .24 .16 Municipal (Bond Buyer) 10.56 9.81 10.94 10.83 4 10.85 -.09 .02 Corporate Aaa New issue Recently offered 14.51 15.03 14.42 13.98 16.12 16.26 15.805 15.63 6 14.79p 6 16.12 1981 FOMC May 18 16.646 1980 Dec. High Mar. Low Early May High FOMC May 18 Federal funds 2 19.83 13.48 18.91 Treasury bills 3-month 6-month 1-year 17.14 15.74 14.06 12.36 11.58 11.50 Commercial paper 1-month 3-month 6-month 20.77 19.88 18.58 Large negotiable CDs 3 1-month 3-month 6-month Short-term rates -.57 Intermediate- and longterm rates Primary conventional mortgages 14.95 1980 Dec. 31 FOMC Mar. 31 Stock Prices: Dow-Jones Industrial 963.99 1003.87 985.77 NYSE Composite 77.86 78.27 76.73 348.99 360.60 368.84 AMEX Composite 216.94 202.34 210.18 NASDAQ (OTC) 1. One-day quotes except as noted. Averages for statement week closest to date shown. Secondary market. preceding for quotes One-day Thursday. July 1 .- 5 -1.47 -.84 -.02 16.626 .50 Percent change from: FOMC Dec. 31 May 18 967.66 .4 -1.8 75.37 -3.2 -1.8 371.88 6.6 .8 214.63 6.1 -1.1 5. Averages for preceding week. 6. One-day quotes for preceding Friday. * Low reached on April 2. 

Federal Reserve (1981, July 6). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19810707_part1

@misc{wtfs_greenbook_19810707_part1,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1981},
  month = {Jul},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19810707_part1},
  note = {Retrieved via When the Fed Speaks corpus}
}