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 March 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 Page THE DOMESTIC NONFINANCIAL ECONOMY Consumer Price Index . . . . . . 1 ..........* * * * * TABLE: Recent changes in consumer prices . . . New Orders for Durable Goods . . . . . * * * . ** * * * * * * * * TABLE: Orders and shipments of durable goods . . . Erratum. .. . . . . . . .* * * * * . * * * * * * * * * ' * " THE DOMESTIC FINANCIAL ECONOMY TABLES: * * ** * * * Monetary aggregates . . . . . . . . . intermediateCommercial bank credit and short- and * * * * * * * * * term business credit. . . . . .* . . Selected financial market quotations. . . . . . . . SUPPLEMENTAL NOTES THE DOMESTIC NONFINANCIAL ECONOMY Consumer Price Index The consumer price index rose 0.4 percent in February--down from 0.6 percent in January--as hikes in food prices slowed sharply. The food index advanced 0.7 percent, after a 1.6 percent climb in January. The energy component edged up 0.2 percent in February, as a surge in fuel oil prices was partly offset by a decline for gasoline. Fuel oil prices came down rapidly in spot markets in February, and this reversal will likely affect retail prices in the near term. Outside the food and energy sectors, consumer prices rose 0.3 percent in February. Services were up 0.4 percent, similar to their average over the past year; this compares with the January increase of 0.7 percent, which was boosted by hikes in telephone and public transportation rates. Commodities excluding food and energy items rose only 0.2 percent for the second month, as declines in apparel and home furnishings reflected more than seasonal markdowns. RECENT CHANGES IN CONSUMER PRICES (Percentage change from preceding period; based on seasonally adjusted data)1 Relative Importance Dec. 1983 1982 1983 H1 1983 Q3 Q4 --Annual rate-All items 2 Food Energy All items less food and energy 3 Commodities 3 Services 3 Memorandum: CPI-W 4 1984 Jan. Feb. -Monthly rate- 100.0 18.7 11.9 3.9 3.1 1.3 3.8 2.6 -.5 3.3 2.4 -4.4 4.5 1.1 3.4 4.0 4.3 -1.7 .6 1.6 -.4 .4 .7 .2 69.4 26.5 42.9 6.0 5.0 7.0 4.9 5.0 4.8 4.2 4.4 4.5 5.9 6.8 5.2 4.9 4.6 5.3 .5 .2 .7 .3 .2 .4 100.0 3.9 3.3 2.9 4.7 2.6 .5 .1 1. Changes are from final month of preceding period to final month of period indicated. 2. Official index for all urban consumers, based on a rental equivalence measure for owner-occupied housing after December 1982. 3. Data not strictly comparable. Before 1983, they are based on unofficial series that exclude the major components of homeownership; beginning in 1983, data include a rental equivalence measure of homeowners costs. 4. Index for urban wage earners and clerical workers. 3 SUPPLEMENTAL NOTES THE DOMESTIC NONFINANCIAL ECONOMY New Orders for Durable Goods New orders for nondefense capital goods rose 1.7 percent in February following an increase of equal magnitude in the previous month. As a result, orders in January and February were about 1-1/2 percent, on average, above their fourth quarter level. Orders for machinery were relatively robust, on average, in January and February, about 2-1/2 percent above their fourth quarter level, with the strength mainly in office and store machinery and electrical equipment. However, orders for communication equipment were down about 21 percent in the two-month period, about reversing the large fourth quarter increase. Shipments for defense capital goods fell 0.9 percent in February, following a 7.4 percent drop in January (a downward revision from the previous January estimate of a 5.6 percent decline). As a result, shipments were down about 2-1/2 percent, on average, in the first two months of the first quarter compared with the fourth quarter of last year, as declines in communication equipment, aircraft and other transportation equipment more than offset small increases in shipments of both electrical and nonelectrical machinery. BUSINESS CAPITAL SPENDING INDICATORS (Percentage change from preceding comparable period; based on seasonally adjusted data) Q3 1983 Q4 2.2 6.3 6.5 -7.4 4.6 6.2 7.1 -6.0 Orders Excluding aircraft & parts 1.0 8.0 1.1 1.7 1.7 5.2 5.5 2.8 .4 -2.6 Unfilled orders Excluding aircraft & parts .8 1.9 -.8 1.1 1.6 2.2 1.7 -.9 .9 .8 181 199 221 190 275 2.7 3.7 .7 N.A. Dec. 1984 Feb. Jan. Producers' durable equipment Nondefense capital goods Shipments Excluding aircraft & parts Addendum: Sales of heavy-weight trucks (thousands of units, annual rate) -. 9 -2.5 Nonresidential structures Nonresidential construction put in place Nonresidential building permits 11.6 -2.1 -2.4 10.4 N.A. 5 SUPPLEMENTAL NOTES THE DOMESTIC NONFINANCIAL ECONOMY Erratum On page I-11 of part 1 of the Greenbook the projection for industrial production in 1985-Q4 was incorrectly printed as 1.8 percent; the correct figure should be 3.0 percent. Similarly, on page I-13 the correct annual figure for industrial production in 1985 should be 5.1 percent instead of 5.0 percent. March 23, 1984 MONETARY AGGREGATES (Based on seasonally adjusted data unless otherwise noted)1 1984 1983 Q2 ---- Percentage change at annual rates ---- 12.8 (13.2) 1. Ml 2. (Ml)2 3. M2 4. H3 20.5 10.8 11.6 (12.7) 10.6 9.3 03 Q4 1 9.5 (7.9) 6.9 7.4 4.8 (4.6) 8.5 9.9 Jan. 10.7 (10.3) 5.5 5.8 Feb. 6.6 (9.5) 8.6 10.0 Growth fra Q4 1983 to Feb. 1984 7.3 (8.2) 7.4 8.7 Levels in billions of dollars Feb. 1984 Selected components 150.2 3.9 -3.4 243.8 9.6 17.7 29.4 133.9 6.1 9.6 3.8 48.0 -8.1 23.4 34.2 16.6 58.6 -44.4 18.4 -13.1 12.2 -1.2 12.4 -2.6 2.3 37.4 3.3 142.2 5.9 19.3 7.3 5.3 -0.7 6.1 6.9 -0.7 6.9 368.4 352.7 772.5 9.1 1.7 4.2 4.0 Other checkable deposits 42.3 28.5 12 minus Ml3 23.0 10.2 30.3 Overnight RPs and Eurodollars, NSA General purpose and broker/dealer money -56.3 market mutual fund shares, NSA 56.5 Commrcial banks Savings deposits, SA, plus 5 290.9 MMDAs, NSA -48.7 Small time deposits 15.6 Thrift institutions Savings deposits, SA, plus 5 175.4 MMDAs, NSA -51.5 Small time deposits 6. Demand deposits 7. 8. 4 M3 minus M26 Large time deposits 7 At commrcial banks, net institutions At thrift Institution-only oney market mutual fund shares, NSA Term RPs, NSA Term Eurodollars, NSA -27.1 MEMORANDA: Managed liabilities at comercial 24. banks (25+26) Large time deposits, gross 25. Nondeposit funds 26. Net due to related foreign 27. institutions, NSA 8 Other 28. U.S. goverment deposits at commercial 9 banks 21.2 62.8 -21.2 11.9 9.7 -0.5 9.2 1689.0 721.2 53.8 -17.0 1.0 12.3 -7.0 18.8 -0.7 11.2 1.1 11.1 324.3 448.2 3.8 9.8 16.4 7.0 16.1 520.8 11.9 -4.6 63.5 15.5 -0.4 57.6 25.4 5.9 69.4 24.2 5.8 63.3 339.4 -17.8 15.2 -1.7 16.6 50.0 -0.9 -39.2 -48.8 0.6 -0.3 -14.6 51.2 -32.6 12.2 15.5 -41.7 40.4 28.9 - 29. 2.4 10.2 Currency 17. 15.4 11.1 5. 227.7 111.7 8.9 -62.1 -24.6 Average monthly change in billions of dollars -- -2.9 -1.2 -1.7 6.0 0.4 5.6 -4.4 -1.5 -2.9 5.1 -1.7 6.8 385.8 281.9 103.9 2.4 1.7 1.2 -2.9 2.9 2.7 -0.7 -2.3 1.9 4.9 -41.5 145.4 0.3 1.0 3.4 4.1 -19.0 -16.7 -2.3 -0.2 -4.3 4.1 -4.8 2.5 0.0 -1.2 Quarterly growth rates are computed on a quarterly average basis. Dollar mounts shown under memoranda for quarterly changes are calculated on an end-month-of-quarter basis. 2. Ml seasonally adjusted using an experimental model-based procedure applied to weekly data. 3. Nontransactions M2 is seasonally adjusted as a whole. 4. Overnight and continuing contract RPs issued to the nonbank public by commrcial 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 sall time deposit component. 5. Growth rates are for savings deposits, seasonally adjusted, plus money market deposit accounts (MMDAs), not seasonally adjusted. Commrcial bank savings deposits excluding MMDAs declined during December, January, and February at rates of 13.2, 22.3, and 18.2 percent respectively. At thrift institutions, savings deposits excluding MMDAs declined during December, January, and February at rates of 6.7, 3.4, and 8.8 percent respectively. 6. The non-K2 component of M3 is seasonally adjusted as a whole. 7. Net of large-denomination time deposits held by money market mutual funds and thrift institutions. 8. Consists of borrowings from other than comaarcial 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 Data are partially Reserve and unaffiliated foreign banks), loans sold to affiliates, loan RPs and other minor items. estimated. 9. Consists of Treasury demand deposits at commrcial banks and Treasury note balances. 1. COMMERCIAL BANK CREDIT AND SHORT- AND INTERMEDIATE-TERM BUSINESS CREDIT (Percentage changes at annual rates, based on seasonally adjusted data)1 Q2 Q3 1983 Q4 Levels in bil. of dollars Feb. 1984P 1984 Dec. Jan. Feb.P ------------------------ Commercial Bank Credit ----------------------(rounded) 1. Total loans and securities 3 at banks 2. Securities 3. Treasury securities 4. Other securities 5. Total loans 3 2 (rounded) 2 9.9 12.4 13.8 11 15 1603.2 23.9 10.2 6.4 14 -2 439.4 53.5 25.1 11.6 8 -1 189.1 5.8 0.6 1.9 18 -4 250.3 4.8 13.0 16.4 10 21 1163.7 424.9 6. 3 Business loans -1.3 7.6 9.3 13.0 11 15 7. Security loans -5.3 25.1 60.8 50.4 9 148 30.9 8. Real estate loans 9.7 11.6 11.5 12.6 18 13 344.3 9. Consumer loans 10.3 15.8 23.1 24.0 25 20 228.0 ------------- Short- and Intermediate-Term 10. 11. Business loans net of bankers acceptances -0.4 Commercial paper issued by non4 financial firms -22.6 Business Credit ------------ 416.4 7.4 9.6 14.4 11 -2.7 25.9 41.6 -20.1 7.8 16.9 8 17 464.5 483.4 30.7 48.1 12. Sum of lines 10 & 11 -3.7 6.2 13. Line 12 plus loans at foreign 5 branches -1.7 6.1 11.4 10 15 7.8 17.8 29.0 36.1 n.a. 96.0 -7.3 20.5 18.9 -43.4 n.a. n.a. 14.7 7.3 n.a. n.a. 6 14. Finance company loans to business 15. Total bankers acceptances outstanding 16. Total short- and intermediateterm business credit (sum of lines 13, 14 and 15) 6 -1.1 9.3 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. Growth rates for January and February 1984 have been estimated after adjusting for major changes in reporting panels and definitions that caused breaks in series at the beginning of January. Data should be regarded as highly preliminary. 3. 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. 4. Average of Wednesdays. 5. Loans at foreign branches are loans made to U.S. firms by foreign branches of domestically chartered banks. 6. Based on average of current and preceding ends of month. SELECTED FINANCIAL MARKET QUOTATIONS 1 (Percent) 1982 FOMC Highs Dec. 21 1984 1983 FOMC FOMC Spring lows Dec. 20 Jan. 30 Mar. 22 Change from: Spring FOMC lows Jan. 30 Short-term rates Federal funds 2 15.61 8.69 8.48 9.62 9.41 10.04 1.56 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 9.04 9.24 8.89 9.79 8.97 9.93 9.27 9.00 9.95 1.83 1.96 2.00 Commercial paper 1-month 3-month 15.73 15.61 8.48 8.43 8.17 8.13 9.83 9.78 9.14 9.13 10.17 10.16 2.00 2.03 1.03 1.03 15.94 16.14 16.18 8.59 8.62 8.78 8.26 8.26 8.29 9.97 9.86 9.95 9.23 9.31 9.43 10.22 10.39 10.72 1.96 2.13 2.43 .99 1.08 1.29 16.36 16.53 9.44 9.56 8.68 8.71 10.39 10.36 9.53 9.70 10.24 10.48 1.56 1.77 .71 .78 17.00 11.50 10.50 11.00 11.00 11.50 1.00 13.50 9.78 8.25 8.98 8.49 8.89 9.83 10.25 9.27 9.85 10.12 10.68 1.63 1.79 U.S. Treasury (constant maturity) 15.16 3-year 14.95 10-year 14.80 30-year 9.87 10.54 10.53 9.36 10.12 10.27 11.44 11.86 11.94 10.88 11.66 11.74 11.83 12.49 12.53 2.47 Municipal revenue (Bond Buyer index) 14.32 10.814 9.21 10.564 9.954 10.39 1.18 17.47 12.90e 11.64 13.45e 12.90e 17.66 17.41 1982 13.635 11.135 Large negotiable CDs 3 1-month 3-month 6-month Eurodollar deposits 2 1-month 3-month Bank prime rate Treasury bill futures June 1984 contract Dec. 1984 contract .85 .83 Intermediate- and long-term rates Corporate--A utility Recently offered Home mortgage rates S&L fixed-rate FNMA ARM, 1-yr. Lows 13 .7 5 2.37 2.26 e 2.11 .85 .08 .82 12.55 13.425 13.295 1: 3.375 .40 1.26 L.805 10.54 11.60.1 11.401 1: Percent change from: 1984 1983 FOMC 1983 FOMC FOMC Jan. 30 highs Dec. 20 Jan. 30 Mar. 22 Highs Stock prices -10.3 1241.97 1221.52 1155.88 776.92 1287.20 Dow-Jones Industrial -9.4 90.30 94.12 93.64 99.63 58.80 NYSE Composite -15.7 209.98 217.40 217.53 249.06 118.65 AMEX Composite -23.8 250.77 274.51 269.23 328.91 159.14 NASDAQ (OTC) 1. One-day quotes except as noted. 4. One-day quotes for preceding 2. Averages for statement week closest to date shown. 5. One-day quotes for preceding 3. Secondary market. e--e mated. -- prel nary. e--estimated. p-preliminary. -5.4 -4.1 -3.5 -6.9 Thursday. Friday. 

Federal Reserve (1984, March 26). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19840327_part3

@misc{wtfs_greenbook_19840327_part3,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1984},
  month = {Mar},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19840327_part3},
  note = {Retrieved via When the Fed Speaks corpus}
}