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 November 12, 1982 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 Retail sales . . . . . . . . . . . . . . . . . Manufacturing and trade inventories . . . . . . . . . . . 1 1 TABLES: Retail sales . . . . . . . . Changes in manufacturing and trade inventories THE DOMESTIC FINANCIAL ECONOMY Tables: Monetary aggregates . . . . . . . . Commercial bank credit and short- and term business credit . . . . . . . Selected financial market quotations . . . . . . . intermediate. . . . . . . . . . . . . . U.S. INTERNATIONAL TRANSACTIONS Table: Summary of U.S. international transactions CORRIGENDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENTAL NOTES Retail sales Retail sales in nominal terms rose only 0.6 percent in October, according to the advance report, indicating a continuation of the lackluster consumer spending pattern. In addition, sales in September were revised down four-tenths percentage point to show a 0.6 percent rise. Autos were the chief source of strength the last two months. Sales in the automotive group were up 3.9 percent in October, following a 4.3 percent increase in September. Excluding this group, retail sales fell 0.1 percent in each month. Manufacturing and trade inventories The book value of retail inventories rose at a $23 billion annual rate in September. As in the previous three months, much of the September inventory rise was in the automotive sector. Between May and September retailers accumulated stocks at a rapid $20 billion annual rate, after liquidating inventories at an $8 billion rate during the first five months of the year. The stock buildup in recent months has been accompanied by sluggish sales performance, and consequently the inventory-sales ratio has been moving up; at 1.45 in September, the ratio about equaled the cyclical peak reached at the beginning of 1982. The book value of total manufacturing and trade inventories increased at an $8.6 billion rate in September--about in line with the moderate rate of accumulation during the two preceding months--as increases in trade stocks offset liquidation at manufacturers. The inventory-sales ratio remained at 1.52. -1- -2RETAIL SALES (Percent change from preceding period except where indicated; based on seasonally adjusted data) Q1 1982 Q2 Q3 July Aug. 1982 Sept. Oct. .1 2.8 -0.1 1.6 -1.1 0.6 .6 -.7 2.4 -1.3 1.2 -1.2 0.5 n.a. Total, less autos and nonconsumption items .2 .7 1.5 1.8 -0.3 -0.1 - .1 Total, exc. auto group, gasoline, and noncon sumption items .5 1.5 1.4 1.7 -0.1 0.0 .1 -.3 1.3 0.0 2.7 -1.8 -0.7 .3 .0 .2 7.1 11.4 -3.8 -5.5 .8 1.3 -2.7 -3.8 2.4 4.3 2.8 3.9 Total sales (Real)1 GAF 2 Durable goods Automotive Furniture & appliances -4.7 2.6 -1.3 2.1 -2.8 -0.4 2.0 Nondurable goods Apparel Food General merchandise 3 Gasoline .2 4.3 -.2 -.5 -2.1 .9 -1.8 2.0 2.1 -4.8 1.7 0.3 1.4 0.3 2.7 1.9 4.3 1.7 2.3 2.3 -0.3 -2.2 0.4 -1.3 -1.4 -0.2 -1.2 -0.2 -0.6 -0.6 -.4 -1.0 .1 .1 -1.5 1. BCD series 59. Data are available approximately 3 weeks following the retail sales 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. AUTO SALES (Millions of units; seasonally adjusted annual rates) Q1 1982 Q2 Q3 8.1 7.5 Foreign-made 2.2 U.S.-made 1982 Sept. Oct. 7.8 8.4. 7.5 2.0 2.2 2.2 2.2 5.9 5.5 5.6 6.2 5.3 Small 3.0 2.5 2.6 3.0 2.4 Intermediate & standard 2.8 3.0 2.9 3.4 3.0 Total Note: Aug. 2.6 Components may not add to totals due to rounding. CHANGES IN MANUFACTURING AND TRADE INVENTORIES (Billions of dollars at annual rates) 1982 1980 1981 38.4 23.0 14.1 8.9 10.6 4.9 37.5 19.1 13.8 5.4 6.7 11.6 -1.7 .9 .5 -3.0 Q1 Q2 Q3(p) July Aug. Sept.(p) -29.0 -12.4 -9.5 -2.9 -7.2 -9.4 -.1 -19.8 -7.1 -12.7 15.7 4.1 10.1 -11.9 -5.8 -6.0 3.1 18.9 7.6 -2.4 -5.9 3.5 3.0 7.1 14.0 -7.4 -3.0 -4.4 -5.2 26.5 8.6 -25.8 -8.6 -17.2 11.4 23.0 7.1 2.6 1.5 -15.5 -8.1 -3.4 -4.0 -7.5 1.7 n.a. n.a. n.a. 4.8 -2.3 5.3 1.7 -3.3 -5.1 n.a. n.a. n.a. 3.1 -4.0 1.8 n.a. 1.8 10.1 n.a. Book Value Basis Total Manufacturing Durable Nondurable Wholesale trade Retail trade Constant Dollar Basis Total Manufacturing Wholesale trade Retail trade INVENTORIES RELATIVE TO SALES 1974-75 Cyclical Peak 2 1982 Cyclical Peak 2 Q1 Q2 1 1982 Q3(p) July Aug.(r) Sept.(p) Book Value Basis Total 1.64 1.54 1.51 1.49 1.51 1.49 1.52 1.52 Manufacturing 1.95 1.81 1.79 1.73 1.71 1.70 1.73 1.72 Durable Nondurable Wholesale trade Retail trade 2.51 1.39 1.24 1.57 2.48 1.18 1.26 1.46 2.41 1.18 1.14 1.42 2.35 1.12 1.18 1.40 2.36 1.09 1.24 1.45 2.33 1.11 1.21 1.40 2.38 1.12 1.22 1.44 2.40 1.08 1.26 1.45 Constant Dollar Basis Total 1.76 1.80 1.76 1.73 n.a. 1.74 1.77 n.a. Manufacturing 2.18 2.19 2.15 2.10 n.a. 2.09 2.14 n.a. Wholesale trade Retail trade 1.40 1.52 1.48 1.49 1.43 1.46 1.41 1.45 n.a. n.a. 1.45 1.46 1.46 1.49 n.a. n.a. 1. Ratio of end-of-period inventories to average monthly sales for the period. 2. Highs are specific to each series and are not necessarily coincident. (r) Revised estimates. (p) Preliminary estimates. MONETARY AGGREGATES (Based on seasonally adjusted data unless otherwise noted)1 1982 Q1 Q2 Q3 Aug. Sept. Oct.P QIV. '81 to Oct. '82P --Percentage change at annual rates-Money stock measures 1. M1 2 2. (M1) 3. M2 4. M3 8.7 3.3 (3.6) 9.5 10.7 3.5 (4.3) 9.7 12.0 7.9 9.3 6.9 10.4 (9.5) 9.8 Selected components 5. Currency 10.4 (13.9) 14.3 18.4 6.5 14.0 3.4 20.3 (14.5) 8.0 8.9 9.3 6.4 7.8 17.5 (17.1) 4.8 7.9 (7.7) 9.6 10.5 6. Demand deposits -0.5 -5.8 -1.4 7. Other checkable deposits 49.5 19.6 11.4 38.4 37.3 46.5 32.6 8. M2 minus M1 (9+10+11+14) 11.5 11.6 15.5 2.0 4.2 10.2 63.6 -8.4 14.3 30.4 -40.4 33.8 9.4 8.7 9.7 1.6 10.2 -1.5 20.9 17.2 2.0 23.8 6.0 0.6 8.1 31.0 12.2 -9.7 21.3 6.4 -7.8 11.7 60.9 12.5 -8.4 20.3 5.3 -5.8 9.3 3.3 16.9 23.4 8.9 6.1 21.6 19.1 19.9 15.5 -2.5 -29.9 15.2 6.2 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 9.5 3 Overnight RPs and Eurodollars, NSA General purpose and broker/dealer money market mutual fund shares,NSA Commercial banks savings deposits small time deposits Thrift institutions savings deposits small time deposits M3 minus M2 (18+21+22) Large time deposits 4 at commercial banks, net at thrift institutions Institutions-only money market mutual fund shares, NSA Term RPs, NSA -Average MEMORANDA: 23. Managed liabilities at commercial banks4 (24+25) 5 Large time deposits, gross 24. 5 funds Nondeposit 25. 26. Net due to related foreign 5 institutions, NSA 5 ,6 Other 27. 28. U.S. government deposits at commercial 7 banks 78.1 25.6 12.7 7.7 4.6 8.8 -1.9 -1.3 -2.3 9.9 -0.4 21.5 -8.8 2.7 47.1 -13.1 29.4 11.8 2.2 16.0 4.2 4.8 3.9 38.1 -3.5 13.2 14.6 19.6 21.3 11.5 13.6 12.6 18.1 -1.8 -6.5 17.8 11.7 6.5 35.1 15.0 14.0 19.3 104.0 -28.1 209.3 110.6 22.3 -78.8 24.6 16.1 monthly change in billions of dollars-- 0.6 2.7 -2.1 6.3 5.8 0.5 1.6 5.6 -4.0 5.3 6.8 -1.5 -6.7 -0.5 -6.2 -2.1 0.0 0.4 0.1 -4.3 0.3 -3.9 2.4 -4.4 -1.8 -3.0 6.9 -2.5 0.2 0.8 1.4 3.1 1.9 45.1 -14.1 0.2 1. Quarterly growth rates are computed on a quarterly average basis. Dollar amounts shown under memoranda for quarterly changes are calculated on an end-month-of-quarter basis. 2. Ml seasonally adjusted using alternative model-based procedure applied to weekly data. 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. Excludes retail RPs, which are in the small time deposit components. .Net of large-denomination time deposits held by money market mutual funds and thrift institutions. >. Adjusted for shifts of assets and liabilities to International Banking Facilities (IBFs) which affected flows from December 1981 to September 1982. 6. 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 (including borrowings from the Federal Reserve and unaffiliated foreign banks), loans sold to affiliates, loan RPs and other minor items. Data are partially estimated. 7. Consists of Treasury demand deposits at commercial banks and Treasury note balances. p--Preliminary. -5COMMERCIAL BANK CREDIT AND SHORT- AND INTERMEDIATE-TERM BUSINESS CREDIT 1 (Percentage changes at annual rates, based on seasonally adjusted data) 1982 Q2 Q3 Aug. Sept. 982 Oct.P QIV '81 to Oct. '82P --Commercial Bank Credit1. 2. Total loans and investments 2 3 at banks , Investments 3 Treasury securities 4. Other securities 3 Total loans 5.8 6.6 4.4 4.7 4.8 8.5 3.4 12.8 4.9 8.3 4.1 42.6 4.8 3.0 6.1 3.0 -2.0 3.4 11.5 9.1 6.2 6.0 4.8 4.9 8.9 16.7 15.0 9.0 3.9 13.0 63.6 22.9 67.3 5.7 3. 5. 8.0 10.1 2 ,3 2 ,3 11.5 2.8 13.4 7.0 5.8 10.7 6. Business loans 7. Security loans 8. Real estate loans 7.8 6.6 2.8 4.0 3.6 2.8 5.9 9. Consumer loans 2.8 2.8 3.0 1.9 0.6 2.5 3.2 -18.3 -26.8 7.0 8.1 85.0 13.3 17.8 --Short- and Intermediate-Term Business Credit-10. 12. 13. 14. Total short- and intermediateterm business credit (sum of lines 14, 15 and 16)3 15.2 13.2 n.a. 7.9 Business loans net of bankers acceptances 3 16.5 15.9 9.0 2.7 Commercial paper issued by non5 financial firms 30.0 16.8 -6.0 -1.9 -52.7 -71.4 6.9 3 Sum of line 11 & 12 18.2 16.0 7.0 2.1 3.9 -3.1 12.7 Line 13 plus loans at foreign branches3,6 18.5 15.8 8.3 5.9 3.8 -3.5 13.4 1.5 15.8 13.0 n.a. n.a. n.a. n.a. 15. Finance company loans to business 16. Total bankers acceptances outstanding 7 1.0 11.7 10.2 n.a. 16.1 13.3 n.a. 12.7 n.a. n.a. 6.6 n.a. 13.5 1. Average of Wednesdays for domestically 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. 3. Adjusted for shifts of assets and liabilities to International Banking Facilities (IBFs) which affected flows from December 1981 to September 1982. 4. Growth of bank credit from the FOMC's December-January base through October 1982, not adjusted for shifts of assets from domestic offices to IBFs, was at an annual rate of 7.4 percent. Adjusted for such shifts after January, growth over this period was 7.9 percent. 5. Average of Wednesdays. 6. Loans at foreign branches are loans made to U.S. firms by foreign branches of domestically chartered banks. 7. Based on average of current and preceding ends of month. n.a--Not available. p--Preliminary SELECTED FINANCIAL MARKET QUOTATIONS 1 (Percent) ____ ____ 1981 ----------Early summer Highs Highs 1982 FOMC Oct. 5 Nov. 10 Change from: Early summer FOMC Highs Oct. 5 Short-term rates Federal funds 2 20.06 14.81 10.77 9.45 -5.36 -1.32 Treasury bills 3-month 6-month 1-year 17.01 15.93 15.21 13.19 13.40 13.12 8.14 9.18 9.66 8.08 -5.11 -5.06 -.06 -.84 Commercial paper 1-month 3-month 18.63 18.29 14.89 15.00 10.23 10.42 Large negotiable CDs 3 1-month 3-month 6-month 18.90 19.01 18.50 14.99 15.58 15.70 19.80 19.56 8.34 8.42 -4.70 -1.24 8.68 8.70 -6.21 -6.30 -1.55 -1.72 10.33 10.72 10.98 8.89 8.97 -1.44 9.14 -6.10 -6.61 -6.56 15.66 16.28 11.23 11.59 9.55 9.73 -6.11 -6.55 -1.68 -1.86 21.50 16.50 13.50 12.00 -4.50 -1.50 14.20 14.07 13.69 13.67 8.93 10.56 8.05(11/11) 9.00(11/11) -5.64 -4.67 -.88 -1.56 U.S. Treasury (constant maturity) 3-year 16.59 15.84 10-year 30-year 15.20 14.98 14.73 14.26 11.62 9.92 -5.06 11.69 11.81 10.48 10.39 -4.25 -3.87 -1.70 -1.21 -1.42 Municipal (Bond Buyer) 13.30 12.63 10.48 4 9.92 -2.71 -. 56 Corporate--Aaa utility Recently offered 17.72 16.19 13.27e 11 -4.44 -1.52 18.63 1981 16.93 15.135 1982 13.915. Eurodollar deposits 1-month 3-month -1.75 -1.84 2 Bank prime rate Treasury bill futures Dec. 1982 contract June 1983 contract Intermediate- and longterm rates S&L fixed-rate mortgage commitment FOMC Oct. 5 .75P -1.22 -3.02 Percent change from: FOMC 1981 Oct. 5 Highs Nov. 11 Highs Stock Prices n-w-Jones Industrial 1,024.05 907.19 1054.73 3.0 16.3 16.7 3.3 81.76 70.06 79.14 Composite 20.7 -10.1 341.85 283.14 380.36 .X Composite 22.6 3.6 188.77 231.52 223.47 NASDAQ (OTC) Thursday. for preceding quotes 4. One-day 1. One-day quotes except as noted. 2. Averages for statement week closest to date shown. 5. One-day quotes for preceding Friday. 3. Secondary market, p--preliminary. e--estimated. U.S. International Financial Transactions Revisions to the preliminary September data on U.S. International Transactions indicate that net private foreign purchases of long term dollardenominated Treasury bonds and notes were about $800 million in September. Moreover, net foreign private purchases of both short and long term dollardenominated Treasury obligations and U.S. corporate securities were $2.0 billion in September. Summary of U.S. International Transactions (in billions of dollars) Private Capital Banks 1. Change in net foreign positions of banking offices in the U.S. (+ = inflow) a) with own foreign offices b) all other Securities 2. Private securities transactions, net a) Foreign net purchases (+) of U.S. corp. bonds b) Foreign net purchases (+) of U.S. corp. stocks c) U.S. net purchases (-) of foreign securities 1981 Year 1 9 8 1 Q-4 -34.7 -31.3 -19.9 .8 -20.8 1.4 -2.5 .8 2.1 .2 4.7 .2 -5.5 -2.9 July Aug. Sept. -12.7 -9.4 -3.3 -9.6 -6.2 -3.3 4.4 .2 4.2 -7.5 -3.4 -4.1 2.1 -2.9 -.2 -1.1 .6 1.7 -.1 .2 -. 1 -. 2 .7 .8 .3 .1 .4 -. 3 -.5 -.4 -3.1 -.5 -1.3 -1.2 1.0 -~~ Q-2 -1.2 -14.6 6.9 -10.7 -8.2 -10.9 Foreign net purchases (+) of U.S. Treasury obligations 1/ 2.5 1.1 1.3 2.0 Official Capital 4. Changes in foreign official reserve assets in U.S. (+ = increase) 5.1 8.1 -3.0 1.6 -10.8 12.7 3.3 .8 1.9 5.4 -6.8 5.0 -1.1 -4.7 2.7 3.6 5.0 .1 4.4 3.7 -1.3 -1.6 -2.1 3.7 -3.3 -.4 .1 -.7 -8.7 21.3 -13.9 4.5 25.8 -1.0 9.3 -3.3 -0.9 9.5 -0.1 1.2 -5.2 1.1 5.0 3. a) By area G-10 countries and Switzerland OPEC All other countries b) By type U.S. Treasury securities Other 2/ 5. Changes in U.S. official reserve assets (+ = decrease) 3/ Other transactions (Quarterly data) 6. U.S. direct investment (-) abroad 7. Foreign direct investment (+) in U.S. 8. Other capital flows (+ = inflow) 4/ 5/ 9. U.S. current account balance 5/ 10. Statistical Discrepancy 5/ MEMO: U.S. merchandise trade balance -- part of line 9 (Balance of payments basis, seasonally adjusted) -27.9 -9.2 1982 8 9 ~Q3 Q-1 -5.9 1.7 1.5 -. 6 1.7 4.9 -2.3 4.7 -3.2 -1.7 1.0 -.3 -. 5 n.a. n.a. n.a. n.a. -13.1 -3.1 * Details may not add to total because of rounding. 1.8 -. 1 .2 n.a. n.a. n.a. n.a. n.a. -6.4 I/ Includes U.S. Treasury notes publicly issued to private foreign residents. 2/ Includes deposits in banks, commercial paper, acceptances, & borrowing under repurchase agreements. 3/ Includes newly allocated SDR's of $1.1 billion in January 1981. 4/' Includes U.S. government assets other than official reserves, transactions by nonbanking concerns, allocations of SDRs, and other banking and official transactions not shown elsewhere. 5/ Includes seasonal adjustment for quarterly data. */ Less than $50 million. NOTE: -1.7 .5 -1.3 n.a. -5.8 2 -3.6 -9- Corrigenda: Domestic Nonfinancial Part 2, page 11-19: In the last line of the table, change "7.3" and "6.5" in the two right-hand columns to read "8.1" and "6.9". A corrected version of the table follows on the next page. International Part 2, page IV-2, bottom panel: The solid line represents the interest rate on U.S. CDs. dashed line is a weighted-average of foreign interbank rates. The The spike in the U.S. CD rate on October 21 is an error; the value should be 8.9 rather than 9.9. -10SELECTED MEASURES OF LABOR COSTS IN THE NONFARM BUSINESS SECTOR (Percentage change at annual rates; quarterly changes based on seasonally adjusted data) 1980 1981 1981 Q4 Q1 1982 Q2 Q3 Dec. 1981Oct. 1982 Hourly Earnings Index, wages - production workers 1 Total private nonfarm Manufacturing Contract construction Transportation and public utilities Trade Services 9.6 8.4 7.3 6.5 6.4 6.2 6.0 10.9 7.7 8.8 8.1 7.7 8.8 8.7 9.0 6.6 2.3 6.3 3.5 6.4 4.8 9.3 8.8 9.5 8.5 7.1 9.1 7.7 4.3 9.2 7.4 3.8 5.1 6.0 6.4 7.6 4.3 4.5 8.4 5.7 4.8 6.5 1981-Q4 to 1982-Q3 Employment Cost Index, wages and salaries - all persons 2 r Total By occupation: White collar Blue collar Service workers By bargaining status: Union Nonunion 9.0 8.8 7.9 7.6 4.8 7.2 8.7 9.6 8.1 9.1 8.6 8.3 9.1 7.3 6.8 7.5 6.6 8.2 5.3 3.8 8.3 8.0 6.6 6.3 10.9 8.0 9.6 8.5 9.1 7.6 7.6 7.3 5.8 3.7 8.2 8.7 First 9 mo. 1982 Major Collective Bargaining Settlements (First-year adjustments) Contracts with COLAs Contracts without COLAs 8.0 11.7 2.2 7.1 8.0 10.6 1981-Q4 to 1982-Q3 Labor Costs and Productivity - all persons I Compensation per hour Output per hour Unit labor costs 10.6 .3 10.2 8.8 -.1 8.9 7.3 -3.5 11.2 7.7 .6 7.1 6.1 .8 5.2 6.6 3.6 2.9 9.8 9.8 6.7 1.6 5.0 1981-Q4 to 1982-Q3 Employment Cost Index, Compensation 3 Compensation per hour Year-todate 8.1 7.1 5.4 8.1 6.9 1. Changes over periods longer than one quarter are measured from final quarter of -eceding period to final quarter of period indicated. Quarterly changes are at ampound rates. . Percent change from final month of preceding period to final month of period indicated. Quarterly changes are compounded; seasonal adjustment by FRB staff. 3. Not seasonally adjusted. 

Federal Reserve (1982, November 15). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19821116_part1

@misc{wtfs_greenbook_19821116_part1,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1982},
  month = {Nov},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19821116_part1},
  note = {Retrieved via When the Fed Speaks corpus}
}