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 January 27, 1984 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 THE DOMESTIC NONFINANCIAL ECONOMY Page Major Collective Bargaining in 1983 . . . .. . . . . . .. TABLES: Negotiated wage changes . . . . . . . . . . . . . Size distribution of first-year wage rate adjustments . . Effective wage change . . . . . . . . . . . . . INTERNATIONAL DEVELOPMENTS TABLE: U.S. merchandise trade. . . . . . . . . . . . . . . . . . THE DOMESTIC FINANCIAL ECONOMY TABLES: Monetary aggregates .. . . . . . . .. . . . . . Commercial bank credit and short- and intermediateterm business credit. . . . . . . . . . . . . . . . . Selected financial market quotations. . . . . . . . SUPPLEMENTAL NOTES THE DOMESTIC NONFINANCIAL ECONOMY Major Collective Bargaining in 1983 Union wage adjustments in 1983 in major settlements (those covering 1,000 or more workers) were the lowest in the sixteen-year history of the series. First-year wage increases for the 3 million workers who negotiated new settlements averaged 2.6 percent--down sharply from the 9.3 percent increase that they received the last time they bargained. year wage settlements averaged 3.8 percent. In 1982, first- In both years, wage freezes and pay cuts contributed importantly to lowering the average first-year wage change, and the contribution of new settlements to total effective wage change for all of the 7.8 million workers covered by major contracts dropped sharply. Cost-of-living adjustments also have been much smaller, owing largely to lower rates of inflation; wage adjustments from COLAs reflected around 53 percent of the rise in consumer prices for the 2.3 million workers who were scheduled for COLA reviews in 1983. Deferred increases from prior contracts remained relatively large in 1983--almost 6 percent for the 3.3 million workers who received them. NEGOTIATED WAGE-RATE CHANGES UNDER MAJOR COLLECTIVE BARGAINING SETTLEMENTS 1 (percent change) Same parties 1981 All Industries First-year adjustments Average over life of contract Workers affected (in thousands) Contracts with COLAs First-year adjustments Average over life of contract Workers affected (in thousands) Contracts without COLAs First-year adjustments Average over life of contract Workers affected (in thousands) Manufacturing First-year adjustments Average over life of contract Workers affected Construction First-year adjustments Average over life of contract Workers affected Nonmanufacturing, Nonconstruction First-year adjustments Average over life of contract Workers affected 1982 as during 1983 under prior settlements 1983 9.8 7.9 3.8 3.6 9.3 6.8 2382 3257 -- 8.0 5.5 2.2 2.1 n.a. n.a. 659 2162 --- 10.6 8.8 7.0 6.6 n.a. n.a. 1723 1095 -- 7.2 6.1 2.8 2.6 n.a. n.a. 804 1724 13.5 11.3 6.5 6.3 n.a. n.a. 1.5 2.3 594 407 -- 667 9.8 7.3 4.3 4.1 n.a. n.a. 5.0 3.7 984 1126 -- -- 2.6 2.8 3013 2.0 2.0 1576 3.3 3.8 1437 .3 2.1 1040 1306 1. Contracts covering 1,000 or more workers; estimates exclude potential gains under cost-of-living clauses. SIZE DISTRIBUTION OF FIRST-YEAR WAGE RATE ADJUSTMENTS IN MAJOR COLLECTIVE BARGAINING SETTLEMENTS (Percent change) Decreases No wage change 0 to 4 4 to 8 8 and over Mean adjustment Number of workers (in thousands) 1981 1982 5 3 3 9 61 2 43 9 23 24 15 22 13 40 10 9.8 3.8 2.6 2,382 3,257 1983 3,013 EFFECTIVE WAGE CHANGE IN MAJOR UNION CONTRACTS AND ITS COMPONENTS Total Effective Wage Change Contribution of: New Settlement Prior Settlements 1978 8.2 3.7 1979 1980 1981 9.1 3.0 9.9 9.5 6.8 3.9 3.5 3.8 3.6 1982 1983 2.5 2.0 3.0 3.6 2.5 1.7 .8 COLA 2.4 3.1 2.8 3.2 1.4 .6 January 27, 1984 U.S. Merchandise Trade (In billions of dollars, seasonally adjusted annual rates) Census Basis 1/ -- CIF Value Exports (1) Year: 1981 1982 1983 Imports 2/ Balance 2/ (3) (2) BOP and GNk bases 3/ Balance (4) 233.7 212.2 200.5 273.4 -39.7 -2b.l 254.9 269.9 -42.7 -69.4 -3b.4 222.6 219. 211.4 195.5 259.6 -36.9 248..2 -28.4 265.1 246.7 -53.7 -24.4 -23.4 -52.3 -51.2 -45.4 -43.1 -65.8 -77.4 -35.2 n.a. Quarters: 1982 - 1 2 3 4 1983 - 1 3 4 2U1.9 194.6 202.6 203.9 245.0 260.4 280.0 294.6 - -58.6 -90.7 -~-------- Months: 1983 - Jan. Feb. Mar. 208.7 195.9 201.0 -- I 251.5 238.9 244.6 -42.8 -43.0 -43.6 -40.0 -32.1 -33.6 248.1 269.7 263.6 -55.2 -82.9 -59.5 -50.8 -67.1 -58.1 -69.0 285.8 -76.3 -86.2 -67.8 Apr. May June 192.9 July Aug. Sept. 199.5 199.6 208.6 275.8 278.3 -69.7 Oct. Nov. Dec. 203.4 311.0 291.0 -107.6 -88.8 -75.6 186.8 204.1 202.2 206.2 -72.7 n.a. 281.8 -81.2 -98.6 -75.8 n.a. -I Published monthly by the Census Bureau. CIF value includes insurance and freight charges for imports only. Data as defined and used in the Balance of Payments Account and in the GNP Account -- does not include insurance and freight charges for imports. In addition, different seasonal factors are used than in Census basis data. MONETARY AGGREGATES (Based on seasonally adjusted data unless otherwise noted) 1 Growth 1983 Q2 ----- 12.2 (12.6) 10.1 8.1 Ml 3 2. (,I) 3. M2 4. M3 Q3 Q4 Percentage 8.9 (6.6) 7.8 8.3 2.1 (3.9) 7.0 8.7 Oct. Nov. Dec. from base period to Q4 19832 change at annual rates --- 1.9 (4.7) 9.1 8.3 0.9 (7.0) 7.2 11.6 6.5 (0.7) 5.5 6.4 5.5 (5.3) 7.8 Levels in billions of dollars Dec. 1983 Selected components 4.0 4.6 -3.4 Other checkable deposits 30.6 19.4 3.8 0.0 4.8 5.7 127.2 M2 minus M1 (9+10+11+14) 9.4 7.5 8.6 11.3 9.2 5.2 1663.5 Demand deposits 7. 8. 13. 14. 15. 16. 17. 21. 22. 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 At thrift institutions 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. U.S. government deposits at commercial banks 8 243.1 -9.6 25.1 77.0 -11.2 12.3 -0.9 11.9 1.7 13.1 7.8 14.9 62.4 *24.1 12.4 10.1 14.9 8.0 4.3 20.1 6.0 3.4 23.1 7.0 8.4 21.7 6.5 56.8 -18.0 2.8 12.3 -9.3 18.2 -8.7 19.4 -11.7 20.2 -2.4 10.6 17.9 3.9 35.1 -0.5 -15.6 55.4 13.8 -4.4 71.9 16.8 0.5 60.0 8.3 -12.7 63.4 18.8 11.8 35.1 15.9 11.7 24.4 329.2 228.8 100.4 -14.9 0.0 15.5 27.1 24.6 -37.3 21.1 137.3 -11.8 14.8 40.2 49.3 *44.0 16.5 -41.9 31.2 - 28. 146.0 9.3 6. 11. 12. 5.8 7.8 Currency 9. 10. 9.2 10.6 5. -25.5 19.6 56.1 -6.1 7.8 138.0 714.7 6.7 9.3 3.3 362.4 352.4 762.0 -10.3 13.8 322.3 439.7 415.2 Average monthly change in billions of dollars - -0.2 -4.3 4.1 -2.9 -1.2 -1.7 5.5 0.3 5.2 -8.8 -5.1 -3.7 2.4 1.7 1.2 -2.9 2.9 2.3 -4.3 0.7 0.2 1.2 -1.6 5.2 19.6 2.6 17.0 383.1 284.2 98.9 -42.7 141.6 -10.4 11.7 Dollar mounts shown under mmoranda for quar1. Quarterly growth rates are computed on a quarterly average basis. terly changes are calculated on an end-month-of-quarter basis. 4 The base period for M2 is February/March 1983. The base period for M3 is Q 2. The base period for Ml is Q2 1983. 1982. 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 comercial banks plus overnight Eurodollar deposits issued by branches of U.S. banks to U.S. nonbank customers, both net of mounts held by money market autual 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 Comercial bank savings deposits excluding NMDAs declined during October, not seasonally adjusted. accounts (MMDAs), At thrift institutions, savings deposits excludNovember, and December at rates of 10.5, 7.9 and 11.5 respectively. - MMDAs declined during October, November, and December at rates of 3.9, 10.5 and 18.6 respectively. Sof large-denomination time deposits held by money market mutual funds and thrift institutions. islsts of borrowings from other than coamercial banks in the form of federal funds purchased, securities sold unuer 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. 8. Consists of Treasury demand deposits at commercial banks and Treasury note balances. COMMERCIAL BANK CREDIT AND SHORT- AND INTERMEDIATE-TERM BUSINESS CREDIT (Percentage changes at annual rates, based on seasonally adjusted data) 1 I Levels in bil. of dollars Dec. 1983 1983_ Q2 q3 ---------------1. Total loans and securities at banks 2 2. Securities 3. Treasury securities 4. Other securities Total loans 5. 2 --- 9.9 8.6 12.0 23.9 6.3 10.5 53.5 13.3 5.8 1.3 4.8 9.5 Nov. Dec.P 198 Commercial Bank Credit ----------------------oct. Q4P 9.9 13.7 13.1 1604.0 13.8 12.3 5.0 435.1 24.6 36.6 25.7 12.2 188.1 0.3 -2.9 2.9 0.5 247.0 8.5 14.1 16.0 1134.1 12.7 6. Business loans 2 -1.3 7.6 9.0 6.9 8.0 13.3 414.9 7. Security loans -5.3 25.1 60.8 75.9 47.6 45.8 27.2 8. Real estate loans 9.7 11.6 11.3 11.0 10.6 11.2 335.2 9. Consumer loans 10.3 15.8 22.7 22.8 219.5 Short- and Intermediate-Term Business Credit 10. Business loans net of bankers acceptances S 13. Commercial paper issued by non3 financial firms 7.4 9.2 5.2 9.0 14.7 406.7 -23.5 5.4 24.7 21.1 5.2 46.6 48.2 Sum of lines 10 & 11 -2.8 7.1 11.0 7.1 8.4 17.4 454.9 Line 12 plus loans at foreign branches 4 -2.2 6.9 11.0 9.9 8.3 15.7 472.5 7.8 17.8 n.a. 18.8 n.a. n.a. -7.3 20.5 n.a. 41.2 n.a. n.a. 14.6 n.a. n.a. 14. Finance company loans to business 5 15. Total bankers acceptances outstanding 16. -0.4 ------------ Total short- and intermediateterm business credit (sum of lines 13, 14 and 15) 5 -1.5 9.9 n.a. 34.5 -17.8 9.8 p--preliminary n.a.--not available. 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. SELECTF D FINANCIAL 1 QUOTATIONS MARKET (Percent) 1982 FOMC Spring -irno-\" Tlroy 1983 FOMC 1984 Change from: Spring FOMC FOMC Highs Dec. 21 15.61 8.69 8.48 9.42 9.62 Q.53 1.n5 -. n9 14.57 14.36 7.96 7.97 7.95 8.7R 9.04 8.93 13.55 7.90 R.nl 9.01 8.11 9.06 9.24 9.27 S.98 9.03 .97 1.nl 1.08 -. 11 -. 26 -. 24 lows Nov. 15 Dec. 20 Jan. 26 lows Dec. 20 Short-term rates Federal funds 2 Treasury bills 3-month 6-month 1-year .094 Commercial paper 1-month 3-month 15.73 8.48 15.61 8.43 8.17 8.13 9.14 9.14 9.83 9.78 9.18 9.17 1.01 1.04 -. 65 -. 61 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 9.25 9.42 9.59 9.97 9.86 9.95 9.27 1.01 1.14 1.23 -. 70 Eurodollar deposits 2 1-month 3-month 16.36 16.53 9.44 9.56 8.68 9.45 10.39 9.54 8.71 9.75 10.36 9.75 .86 1.04 -. 85 -. 61 17.00 11.50 10.50 11.00 11.00 11.00 13.55 11.48 9.32 9.80 8.37 9.30 9.52 8.96 8.71 9.88 10.05 9.58 .59 .87 -.56 -. 47 9.36 11.14 11.86 11.94 10.90 11.63 Bank prime rate Treasury bill futures Mar. 1984 contract Sept. 1984 contract Q.40 9.52 -. 46 -. 43 Intermediate- and long-term rates U.S. Treasury (constant maturity) 3-year 15.16 10-year 14.95 30-year 14.80 9.87 10.54 10.53 10.12 10.27 10.96 11.70 11.72 Municipal revenue (Bond Buyer index) 14.32 10.81 4 9.21 10.18 4 Corporate--A utility Recently offered 17.47 12.90e 11.64 Home mortgage rates S&L fixed-rate FNMA ARM. 1-yr. 17.66 17.41 13.635 11.135 12.55 10.54 10.564 9.95 .74 -. 61 13.13e 13.45e 12.86p 1.22 -.59 13.475 11.405 13.425 11.605 13.355 11.405 .80 .86 -.07 -.20 1984 1983 1982 FOMC Lows -. 24 -. 23 11.70 1.54 1.51 1.43 Highs Percent change from: 1983 FOMC Nov. 15 Dec. 20 Jan. 26 -. 24 highs FOMC Dec. 20 Stock prices -1.0 -1.5 1247.97 1241.97 1229.69 776.92 1248.30 Dow-Jones Industrial 1.3 -4.2 94.88 93.64 95.49 99.01 58.80 NYSE Composite 2.0 -10.0 221.84 217.40 219.38 246.38 118.65 1EX Composite .4 -16.2 275.61 278.92 274.51 328.91 159.14 .ASDAO (OTC) Thursda preceding quotes for 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. e--estimated. p--preliminary. 3. Secondary market. 

Federal Reserve (1984, January 30). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19840131_part2

@misc{wtfs_greenbook_19840131_part2,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1984},
  month = {Jan},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19840131_part2},
  note = {Retrieved via When the Fed Speaks corpus}
}