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 August 19, 1983 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 Personal Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TABLES: Personal income . THE DOMESTIC FINANCIAL ECONOMY TABLES: Monetary aggregates . . . . . . . . . Commercial bank credit and short- and term business credit . . . . . . . Selected financial market quotations . . . . . . . . intermediate. . . . . . . . . . . . . . . . . . . . . . 2 SUPPLEMENTAL NOTES THE DOMESTIC NONFINANCIAL ECONOMY Personal Income Disposable personal income jumped $40 billion in July as taxes were cut by $29 billion; increases in private payrolls accounted for most of the before-tax income gain. Private payrolls grew at a $10.8 billion annual rate in July--about the same as the monthly average during the first half of the year but off a bit from the second-quarter pace. Transfer payments declined for the second consecutive month owing to the shrinking number of claimants for unemployment insurance. But personal interest income rose $1-3/4 billion for a third month, apparently reflecting the recent rise in interest rates. still falling. Farm income fell in both June and July when prices were According to the Bureau of Economic Analysis, the PIK program did not contribute to farm income in July, although the Department of Agriculture has begun issuing title to grain stockpiles. BEA expects to reflect the PIK income in its data later in the third quarter. Outlays grew only $9 billion in July compared with an average monthly increase of $28 billion during the second quarter, and the saving rate climbed from a pre-tax cut level of 3.7 percent in June to 5 percent in July. The slowdown in consumption growth during June and July from the rapid April-May pace occurred primarily in durable goods spending although growth of outlays for services and nondurables also moderated. PERSONAL INCOME (Based on seasonally adjusted data) 1981 1982 Q1 Q2 1983 May June July - - Percentage changes at annual rates1 - Total personal income Wage and salary disbursements Private Disposable personal income Nominal Real 11.1 4.6 4.0 9.0 14.8 5.9 6.8 8.4 8.5 3.6 2.8 6.4 6.4 9.7 10.4 14.8 13.7 6.5 10.2 8.8 9.7 11.1 3.4 5.1 .2 5.2 2.9 8.6 3.3 10.4 6.6 4.4 2.3 20.9 -- 2 - - Changes in billions of dollars - - Total personal income Wage and salary disbursements Private Manufacturing Other income Transfer payments 18.9 10.6 8.4 21.8 33.2 13.3 15.4 8.8 7.0 1.0 5.1 3.4 -.6 8.3 6.9 3.7 14.8 13.4 4.5 20.1 14.9 4.0 8.9 11.3 3.8 12.2 10.8 5.1 11.3 2.8 6.0 4.2 1.3 -.3 8.0 1.5 14.3 4.0 5.1 -.3 3.8 -.7 .5 1.2 .9 1.2 .7 .6 15.8 2.0 10.0 1.0 9.1 2.1 16.2 2.9 19.9 5.9 8.4 2.1 40.3 -- 6.6 5.8 5.2 4.0 3.8 3.7 5.0 Less: personal contributions for social insurance Disposable personal income Nominal Real Memorandum: Personal saving rate 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 periods are compounded rates of change; monthly changes are not compounded. 2. Average monthly changes are from the final month of the preceding period to the final month of period indicated; monthly figures are changes from the preceding month. MONETARY AGGREGATES 1 (Based on seasonally adjusted data unless otherwise noted) 1983 1982 Q4 ----Money stock measures 1. M1 3 2. (M1) 3. M2 4. M3 Q1 May July June Percentage change at annual rates --- 13.1 14.1 (14.5) (13.8) 9.3 9.5 Q2 Growth from base period to July 19832 20.3 10.2 12.2 (12.7) 10.1 8.2 26.3 (21.4) 12.4 11.0 10.2 (7.6) 10.4 11.0 8.9 (3.3) 6.3 5.1 12.2 (7.7) 8.4 9.1 Level in billions of dollars July 1983 Selected components 5. Currency 7.4 10.9 10.6 11.3 140.9 6. Demand deposits 8.4 2.7 4.0 18.1 245.7 7. Other checkable deposits 34.0 46.2 30.6 61.6 17.9 8. M2 minus M1 (9+10+11+14) 8.1 22.4 9.4 8.1 10.4 23.9 34.2 47.3 106.7 17.4 -75.1 52.4 15.3 9.9 -57.5 57.8 -44.0 16.5 -45.8 12.7 -12.8 14.6 -10.3 13.0 138.4 682.6 35.5 -0.5 4.1 296.1 -48.5 14.7 62.4 -24.1 12.4 34.4 -10.1 7.6 25.5 2.6 10.2 2.7 24.4 8.4 356.6 326.0 744.2 30.3 -6.0 171.0 -51.0 56.8 -18.0 28.2 -8.3 18.1 3.6 -4.3 18.8 335.3 408.9 10.4 -36.5 -2.0 3.2 14.8 -1.2 384.6 4.2 -1.5 29.3 -43.0 -49.9 -14.6 -0.1 -15.0 55.4 -3.6 -21.3 57.2 20.8 12.7 46.3 6.3 -15.2 71.7 306.3 226.5 79.8 32.7 34.4 -32.7 19.4 -41.9 31.2 -17.6 73.1 -35.6 -21.2 -18.4 -45.8 38.6 42.8 9. 10. 11. 12. 13. 14. 15. 16. 17. 4 Overnight RPs and Eurodollars, NSA General purpose and broker/dealer money market mutual fund shares, NSA Commercial banks Savings deposits, SA, plus MMDAs, NSA 5 Small time deposits Thrift institutions Savings deposits, SA, plus 5 MMDAs, NSA Small time deposits M3 minus M2 (18+21+22) Large time deposits 6 At commercial banks, net thrift institutions At Institution-only money market mutual fund shares, NSA Term RPs, NSA MEMORANDA: 23. Managed liabilities at commercial banks (24+25) Large time deposits, gross 24. 25. Nondeposit funds Net due to related foreign 26. institutions, NSA 7 Other 27. 28. U.S. government deposits at commercial 8 banks 14.7 124.2 1609.9 Average monthly change in billions of dollars -- -5.2 -6.5 1.3 -19.6 -17.1 -2.5 1.3 -2.8 4.1 1.4 -9.2 10.6 -2.1 0.5 -2.6 -13.5 -1.7 -11.8 361.7 285.8 75.9 -0.7 2.0 -4.9 2.5 2.4 1.7 4.7 5.9 2.7 -5.3 -3.7 -8.1 -58.8 134.7 0.3 0.2 0.2 -2.2 1.7 11.0 24.0 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. The The base period for M2 is the February-March 1983 average. 2. The base for M1is the second-quarter 1983 average. base period for M3 is the fourth-quarter 1982 average. 3. M1 seasonally adjusted using an experimental model-based procedure applied to weekly data. 4. Overnight and continuing contract RPs issued to the nonbank public by commercial banks plus overnight Eurodollar deposits issued by branches of U.S. banks to U.S. nonbank customers, both net of amounts held by money market mutual funds. Excludes retail RPs, which are in the small time deposit component. 5. Beginning December, 1982, growth rates are for savings deposits, seasonally adjusted, plus money market deposit accounts (MMDAs), not seasonally adjusted. Savings deposits excluding MMDAs were unchanged in May and June and declined at an annual rate of 10.2 in July. At thrift institutions, saving deposits excluding MMDAs increased during May and June at rates of 10.6 percent, 12.5 percent, and declined at an annual rate of 2.0 in July. 6. Net of large-denomination time deposits held by money market mutual funds and thrift institutions. 7. 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 Data are partially estimated. and unaffiliated foreign banks), loans sold to affiliates, loan RPs and other minor items. 8. Consists of Treasury demand deposits at commercial banks and Treasury note balances. 4 COMMERCIAL BANK CREDIT AND SHORT- AND INTERMEDIATE-TERM BUSINESS CREDIT (Percentage changes at annual rates, based on seasonally adjusted data)1 1982 Q4 Q1 Q2 1983 May June July Commercial Bank Credit ------ 1. 2. Total loans and securities 2 at banks Securities 3. Treasury securities 4. Other securities 5. Total loans 2 2 Levels in bil. of dollars July 1983 -------- 6.3 10.7 9.9 10.7 10.0 9.7 1502.6 15.9 25.0 23.9 29.6 18.4 4.6 418.9 43.0 61.1 53.5 63.1 36.8 11.9 172.9 2.5 5.3 5.8 7.9 6.4 -1.0 246.0 3.0 5.7 4.8 3.7 6.9 11.6 1083.6 -0.3 3.9 -1.3 0.9 6.4 11.9 401.2 37.2 -34.0 -5.3 26.2 -56.4 75.3 23.7 6. Business loans 7. Security loans 8. Real estate loans 4.8 7.1 9.7 8.5 13.0 9.1 319.4 9. Consumer loans 4.9 6.3 10.3 11.6 11.5 20.4 203.2 ---10. 11. 12. Short- and Intermediate-Term Business Credit ----------- ---- Total short- and intermediateterm business credit (sum of lines 14, 15 and 16) -3.0 -3.1 -1.5 Business loans net of bankers acceptances 0.5 3.6 -0.4 3.0 -46.5 Commercial paper issued by non3 financial firms 13. Sum of lines 11 & 12 14. Line 13 plus loans at foreign 4 branches -39.6 -33.1 -23.5 -4.6 -0.4 -2.9 -4.9 5 15. Finance company loans to business 16. Total bankers acceptances outstanding -15.2 5 22.9 n.a. 7.2 2.7 n.a. 10.7 392.7 -13.4 44.3 -2.1 6.7 8.3 437.0 0.3 -2.3 0.0 6.7 7.2 453.6 4.0 7.8 7.3 10.2 n.a. n.a. -8.5 n.a. n.a. -30.9 -7.3 -5.1 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. Average of Wednesdays. 4. Loans at foreign branches are loans made to U.S. firms by foreign branches of domestically chartered banks. 5. Based on average of current and preceding ends of month. n.a.--not available. SELECTED FINANCIAL MARKET QUOTATIONS 1 (Percent) 1982 FOMC highs Dec. 21 1983 Recent FOMC FOMC May 24 July 13 Aug. 18 low Change from: Recent FOMC low July 13 Short-term rates Federal funds 2 15.61 8.69 8.48 8.72 9.21 9.67 1.19 Treasury bills 3-month 6-month 1-year 14.57 14.36 13.55 7.90 8.01 8.11 7.96 7.97 7.95 8.47 8.48 8.47 9.10 9.30 9.39 9.30 9.41 9.44 1.34 1.44 1.49 15.73 15.61 8.48 8.43 8.17 8.13 8.48 8.52 9.19 9.30 9.40 9.48 1.23 1.35 Large negotiable CDs 3 1-month 3-month 6-month 15.94 16.14 16.18 8.59 8.62 8.78 8.26 8.26 8.29 8.64 8.73 8.95 9.33 9.58 10.00 9.54 9.71 10.03 1.28 1.45 1.74 Eurodollar deposits 2 1-month 3-month 16.36 16.53 9.44 9.56 8.68 8.71 8.96 Q.14 9.70 10.05 9.85 10.30 1.17 1.59 .15 .25 17.00 11.50 10.50 10.50 10.50 11.00 13.97 13.55 8.63 9.32 7.99 8.37 8.72 9.15 9.51 10.10 9.31 9.95 1.32 1.58 -.20 -.15 9.87 10.54 10.53 9.36 10.12 10.27 9.91 10.56 10.69 10.91 11.40 11.44 11.10 11.70 11.68 1.74 1.58 1.41 .92 Commercial paper 1-month 3-month Bank prime rate Treasury bill futures Sept. 1983 contract Mar. 1984 contract .21 .18 Intermediate- and longterm rates U.S. Treasury (constant maturity) 15.16 3-year 14.95 1)-year 30-year 14.80 Municipal (Bond Buyer) 13.44 10.054 8.78 9.294 9.554 9.70 Corporate-Aaa utility Recently offered 16.34 11.96e 11.03 1 1 .55e 12.38e 12. 7 0p 17.66 1982 13.635 12.55 12.555 13.305 1983 FOMC FOMC 13.845 S&L fixed-rate mortgage commitment lows highs May 24 July 13 Aug. 18 1.67 .54 1.29 Percent change from: FOMC 1983 high July 13 Stock prices -4.5 1219.04 1197.82 1192.48 776.92 1248.30 Dow-Jones Industrial 95.90 94.73 -4.3 58.80 99.01 95.58 NYSE Composite -6.3 241.07 230.98 246.38 229.30 118.65 AMEX Composite 314.59 299.78 -8.9 159.14 328.91 307.36 NASDAQ (OTC) 4. One-day quotes for preceding 1. One-day quotes except as noted. 2. Averages for statement week closest to date shown. 5. One-day quotes for preceding p-preliminary. e-estimated. 3. Secondary market. -.4 -1.2 -4.2 -4.7 Thursday. Friday. 

Federal Reserve (1983, August 22). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19830823_part3

@misc{wtfs_greenbook_19830823_part3,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1983},
  month = {Aug},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19830823_part3},
  note = {Retrieved via When the Fed Speaks corpus}
}