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 III - FOMC August 15, 1986 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 FINANCIAL ECONOMY Page Industrial production. . . . . . .. ... . . Producer prices. . . . . Retail inventories . . . . . . . * Tables . . . . . Industrial production Recent changes in producer prices. Business inventories . . . . . . Inventory/sales ratios . . . ... * S S * S S S S S S * S S S S S S * S S S S S S THE FINANCIAL ECONOMY Tables Monetary aggregates .... . . . ......... Commercial bank credit and short- and intermediate. .. term business credit . . . . . . . Selected financial market quotations .. . . . . . .. . . . . .. SUPPLEMENTAL NOTES THE DOMESTIC NONFINANCIAL ECONOMY Industrial production Industrial production edged down 0.1 percent in July after declining 0.3 percent in June and 0.5 percent in May. Despite strike related rebounds, mainly in communication equipment, activity remained generally sluggish. Output of consumer goods and durable materials was off in July and weakness in most business equipment industries continued. Output of consumer goods decreased 0.3 percent in July after a similar decline in June. Auto assemblies fell to a 7.6 million unit rate, from an 8.0 million unti rate in June, although the decline was largely offset by gains in production of light trucks. Production of home goods edged down in July and nondurable goods output fell 0.3 percent. Most business equipment groups posted declines except commercial equipment, which rebounded 1.4 percent in July owing largely to a resumption of production of telephone equipment after the strike-related curtailment in June. Elsewhere in the equipment sector, the defense and space component continued to edge up, while oil and gas well drilling was reduced again, although much less than in the recent months and with a negligible effect on overall industrial output. Production of construction supplies rose 0.4 percent in July after a 1.6 percent drop in June. Materials production was little changed in July as durable good materials decreased while nondurable goods, such as chemicals and paper, as well as energy materials both rose. 2 Producer Prices Producer prices of finished goods fell 0.4 percent in July-the fifth decline of this year-as energy prices dropped 12 percent. Food prices, however, posted a substantial increase, and prices of other finished goods advanced 0.3 percent. In the finished energy component, refinery prices of gasoline and fuel oil plunged 19 and 17 percent, respectively; both were little more than half of their July 1985 levels. At the wellhead level, crude oil prices dropped 9 percent to less than half their year-earlier level. More recently, spot prices of crude oil have picked up in domestic and world markets, in response to the recent OPEC agreement on a temprorary production cutback, suggesting an upturn in domestic producer prices of petroleum and products in coming months. Producer prices of finished foods rose about 2 percent in July, reflecting reduced meat supplies as well as weather-related influences on prices of poultry, eggs, and apparently, fresh fruits and vegetables. At the farm level, prices were up sharply for livestock and broilers; but corn prices plummeted, and wheat and soybeans also fell. Price trends in agricultural commodity markets since the mid-July PPI pricing date indicate further increases for livestock and poultry and declines for grains and soybeans. Excluding food and energy items, producer prices of finished consumer goods rose 0.3 percent in July,--more than in recent months-with notable increases for tobacco products, pharmaceuticals, and passenger cars. The index for capital equipment advanced 0.2 percent-similar to the average pace over the past year; substantial increases were posted for trucks, cars, and commercial furniture. At earlier stages of processing, prices of intermediate materials less food and energy rose 0.2 percent while prices of crude nonfood materials less energy edged up 0.1 percent. Both are little different from their year-earlier levels. Retail inventories The book value of retail inventories rose at an annual rate of $11.7 billion in June, after a $15.5 billion decline in the preceding month. About three-fourths of the June accumulation was at automotive outlets. Most types of stores selling nondurable goods reported inventory declines. In particular, the book value of general merchandise stocks fell at a $3.3 billion rate in June, after a similar drop one month earlier. These consecutive reductions have notably improved the general merchandisers' overall inventory position: the inventory-sales ratio for stores in this category dropped to 2.26 in June-down from the recent high of 2.37 observed in January this year. Similar improvement was also seen for stores in the broader G.A.F. (general merchandise, apparel, and furniture and appliances) grouping, where the ratio dropped to 2.27 in June, compared with the January high of 2.38. For all manufacturing and trade, inventories rose in June at a $27.4 billion annual rate, more than reversing the $22.5 billion drop in the preceding month. Total sales by manufacturers and retail and wholesale establishments rose 0.5 in June, leaving the overall inventory-sales ratio unchanged at 1.39. For the second quarter as a whole, inventories in all manufacturing and trade rose at a $3.3 billion rate in book-value terms, somewhat more than the accumulation BEA had assumed when the preliminary second-quarter GNP estimates were prepared. INDUSTRIAL PRODUCTION (Percentage change from preceding period; based on seasonally adjusted data) 1986 1986 1986 Q1 Q2 May 1986 June July -Annual rate- .7 -2.8 -.5 -.3 -.1 .2 -1.3 1.9 2.7 1.6 -1.4 -2.9 4.3 -3.3 7.0 -.4 -.6 -.1 -2.5 .7 -.6 -.7 -.3 .4 -.5 -.1 -.1 -.3 -.1 -.3 -4.8 Equipment .3 Business -4.0 Defense and space Oil and gas drilling -59.7 -10.5 -6.8 1.9 -86.9 -1.3 -1.3 .2 -12.8 -1.1 -1.2 .1 -10.1 .0 .0 .1 -4.0 5.7 10.8 3.9 .9 .4 .2 -.3 -1.6 .0 .4 1.4 -5.0 .7 -8.1 -.7 -1.2 -.1 -.1 .1 -.4 .6 .5 .0 -.2 .2 .4 Total Index Products Final products Consumer goods Durable Nondurable Intermediate products Construction supplies Materials Durable goods Nondurable goods 7.1 2.3 Energy materials -2.3 -5.3 --Monthly rate- RECENT CHANGES IN PRODUCER PRICES (Percentage change; based on seasonally adjusted data) 1 Relative Importance Dec. 1985 1985 1985 Q4 1986 Q1 -Annual Finished goods Consumer foods Consumer energy Other consumer goods Capital equipment 1986 June July Q2 rate- -Monthly rate- 100.0 24.5 12.5 40.3 22.7 1.8 0.5 -0.3 2.7 2.7 9.2 16.0 20.7 4.4 5.6 -12.5 -8.1 -66.9 2.5 0.7 0.0 6.0 -25.1 1.7 1.9 0.0 0.0 -0.6 0.0 0.1 -0.4 1.9 -11.9 0.3 0.2 Intermediate materials 2 Exc. energy 95.3 79.6 0.0 -0.1 2.9 0.0 -11.8 -1.0 -4.8 -1.3 0.0 0.0 -0.7 0.2 Crude food materials Crude energy Other crude materials 52.5 31.6 15.9 -6.4 -4.9 -4.3 47.0 -4.0 1.5 -24.7 -51.3 -0.2 -0.2 -33.8 6.6 -0.8 -3.0 1.1 3.4 -2.8 0.1 1. Changes are from final month of preceding period to final month of period indicated. 2. Excludes materials for food manufacturing and animal feeds. BUSINESS INVENTORIES (Change at annual rates in seasonally adjusted book value; billions of dollars) Manufacturing and trade (Pervious) Manufacturing Trade, total Wholesale Retail Durable Auto Nondurable 1985 Q3 1985 Q4 1986 Q1 1986 Q2 1986 Mar -6.4 17.6 20.1 3.3 36.0 -6.6 .2 -2.1 2.3 -3.0 -6.8 5.3 -8.6 26.2 6.1 20.1 17.8 19.9 2.3 -9.3 29.4 4.5 24.9 21.0 15.1 3.9 -5.2 8.6 7.4 1.2 1.3 -2.1 -.1 4.0 32.0 5.9 26.1 27.2 20.5 -1.2 -2.6 7.6 .3 7.3 1.6 -6.0 5.7 -12.1 -10.4 5.1 -15.5 -12.8 -9.2 -2.7 -1.1 28.6 16.8 11.7 15.0 8.8 -3.2 1986 Apr 1986 May 1986 June 5.1 -22.5 -23.8 27.4 Totals may not add because of rounding. INVENTORY/SALES RATIOS Manufacturing and trade Manufacturing Trade, total Wholesale Retail r - Revised. p - Preliminary. 1985 Q3 1985 Q4 1986 Q1 1986 Q2 1986 Mar 1986 Apr 1986 May r 1986 June p 1.36 1.36 1.38 1.39 1.40 1.37 1.39 1.39 1.46 1.28 1.18 1.37 1.42 1.30 1.18 1.43 1.43 1.34 1.20 1.47 1.43 1.35 1.24 1.45 1.46 1.35 1.22 1.47 1.42 1.33 1.20 1.46 1.44 1.35 1.25 1.44 1.44 1.35 1.24 1.45 August 15, 1986 MONETARY AGGREGATES (Based on seasonally adjusted data unless otherwise noted) 1 1984:04 to 1985:Q4 --1. 2. Ml M2 3. M3 11.9 8.6 7.6 Q1 Q2 1986 May June JulyP Growth from 04 1985 to July 1986P Percentage change at annual rates -7.7 4.3 7.4 15.8 10.4 8.0 23.4 12.4 5.7 14.6 9.5 6.6 16.9 12.6 12.9 13.5 8.5 8.3 Levels in billions of dollars July 1986P Selected components 4. Currency 7.5 7.5 6.2 5. Demand deposits 8.6 3.0 6. Other checkable deposits 22.3 7. M2 minus M12 7.6 8. 9. 10. 11. 12. 13. 14. Overnight RPs and Eurodollars, NSA General purpose and broker/dealer money market mutual fund shares, NSA Commercial banks Savings deposits, SA, 3 plus MMDAs, NSA Small time deposits Thrift institutions Savings deposits, SA, 3 plus MMDAs, NSA Small time deposits 6. M3 minus M24 17. 18. 19. 20. 21. 22. Large time deposits At commercial banks, net 5 At thrift institutions Institution-only money market mutual fund shares, NSA Term RPs, NSA Term Eurodollars, NSA MEMORANDA: Managed liabilities at commercial T. banks (24+25) 24. Large time deposits, gross Nondeposit funds 25. 26. Net due to related foreign institutions, NSA 27. Other 6 5.5 6.1 177.5 15.2 25.7 14.1 14.3 288.3 15.0 25.8 32.9 24.0 30.2 204.0 3.2 8.7 8.8 7.8 11.3 2021.0 3.6 -55.4 99.4 69.3 18.9 3.0 -7.1 9.3 9.1 10.9 7.2 27.8 5.8 19.0 -0.6 5.1 8.7 5.3 4.3 13.2 -3.1 7.4 13.7 -0.4 1.3 6.6 3.7 11.1 -4.6 -4.9 -- 9.6 26.7 7.5 14.6 6.5 200.1 872.6 15.8 -9.6 6.3 21.4 -9.7 7.5 15.8 -5.3 6.5 492.5 380.1 888.3 13.8 2.8 21.4 -4.5 24.9 -5.2 18.0 -1.9 385.1 20.3 -1.5 -20.8 -5.1 13.9 661.4 15.6 18.5 10.0 -1.7 -8.6 11.0 -15.4 -23.0 -0.7 -1.9 -2.1 -2.2 2.4 -0.9 8.0 446.5 280.8 26.8 44.1 7.7 39.2 -13.2 -1.5 32.4 -17.5 -40.0 40.0 -1.8 77.5 65.1 76.1 -17.3 -44.3 -10.7 -23.2 503.3 165.7 Average monthly change in billions of dollars - 2.3 1.0 1.3 7.5 3.4 4.1 -5.8 -2.6 -3.2 -5.3 -6.5 1.2 -3.7 -0.6 -3.1 0.3 -1.3 1.6 469.5 338.5 131.0 0.4 1.0 2.1 2.0 -1.6 -1.7 4.1 -2.9 -2.0 -1.1 -6.0 7.5 -30.3 161.2 government deposits at commercial 0.2 14.6 -0.6 0.9 banks 7 3.9 -2.8 -3.9 1. Quarterly growth rates are computed on a quarterly average basis. uollar amounts snown under memoranda ror quar- 28. U.S. terly changes are calculated on an end-month-of-quarter basis. 2. Nontransactions 42 is seasonally adjusted as a whole. 3. Growth rates are for savings deposits, seasonally adjusted, plus money market deposit accounts (MMDs), not seaCommercial bank savings deposits excluding MMDAs increased during June and July 1986 at rates sonally adjusted. institutions, savings deposits excluding MMDAs increased At thrift of 17.7 percent and 23.8 percent, respectively. during June and July 1986 at rates of 29.1 percent and 22.9 percent, respectively. .The non-M2 component of M3 is seasonally adiusted as a whole. institutions. Rat of large-denomination time deposits held by money market mutual funds and thrift Consists of borrowings from other than commercial banks in the form of federal funds purchased, securities sold for borrowed money (including borrowings from the Federal der agreements to repurchase, and other liabilities estimated. Data are partially Reserve and unaffiliated foreign banks, loan RPs and other minor items). 7. Consists of Treasury demand deposits and note balances at commercial banks. p--preliminary COMMERCIAL BANK CREDIT AND SHORT- AND INTERMEDIATE-TERM BUSINESS CREDIT (Percentage changes at annual rates, based on seasonally adjusted data) 1 1985 04 01 02 1986 May June JulyP August 15, 1986 In Levels Levels in bil. of dollars JulyPe Commercial Bank Credit 1. 2. Total loans and securities at banks Securities 11.5 9.3 3.9 5.9 3.8 12.5 1984.2 19.9 2.0 4.9 10.4 6.3 33.5 471.2 3.1 45.9 285.3 15.0 185.9 3. U.S. government securities -3.5 -5.3 7.9 18.2 4. Other securities 62.5 12.8 0.7 -1.3 8.9 11.6 3.6 4.6 3.0 6.1 1513.0 4.7 0.0 508.7 5. Total loans 11.2 6. Business loans 6.0 5.3 2.1 -2.6 7. Security loans 4.0 101.7 -62.0 -40.1 -98.5 64.9 44.8 8. Real estate loans 12.6 13.0 13.4 15.5 11.6 13.0 455.6 9. Consumer loans 8.5 11.0 6.7 7.6 5.9 4.3 305.6 10.2 7.3 -1.6 4.8 -0.6 -3.6 198.3 10. Other loans Short- and Intermediate-Term Business Credit 11. Business loans net of bankers acceptances 2 12. Loans at foreign branches 13. Sum of lines 11 & 12 14. Commercial paper issued by nonfinancial firms 15. Sums of lines 13 & 14 16. Bankers acceptances: 5 related4 17. 3 U.S. 6.0 5.2 1.0 3.6 0.7 503.8 -16.5 0.0 -21.5 -26.7 34.1 18.1 5.2 5.1 0.2 -4.4 2.5 1.8 522.0 55.5 -14.4 -10.3 -2.9 13.1 11.8 2.1 -1.2 -4.2 -6.2 16.3 18.8 9.5 1.7 -0.4 19.2 16.4 11.3 4.5 -3.8 -26.1 4.0 -21.6 81.8 -1.4 603.8 - trade -30.8 Line 15 plus bankers acceptances: U.S. trade related 18. Finance company loans to business 19. Total short- and intermediateterm business credit (sum of lines 17 & 18) 4 25.8 n.a. 33.2 (Jun) -3.0 5.1 n.a. 637.7 (Jun) 3.8 -2.3 -2.3 n.a. 158.5 (Jun) 0.5 -2.0 3.8 n.a. 796.3 (Jun) n.a.-not available. p-preliminary 1. Average of Wednesdays for domestically chartered banks and average of current and preceding ends of months for foreign-related institutions. 2. Loans at foreign branches are loans made to U.S. firms by foreign branches of domestically chartered banks. 3. Average of Wednesdays. ased on average of current and preceding ends of month. 4. 5. Consists of acceptances that finance U.S. imports, U.S. exports and domestic shipment and storage of goods. SELECTED FINANCIAL MARKET QUOTATIONS 1 (Percent) 1984 Highs 1985 March highs April Lows Federal funds 2 11.63 8.58 Treasury bills 3 3-month 6-month 1-year 10.67 10.77 8.80 9.13 11.13 9.25 5.81 5.79 11.42 8.94 9.12 8.89 1986 FOMC July 9 Aug. 14 6.95 6.69 6.33 -0.62 -0.36 5.77 5.88 5.90 5.94 5.59 5.56 -0.18 5.66 -0.25 -0.13 -0.29 -0.34 -0.28 6.42 6.30 6.65 6.14 -0.28 -0.51 6.51 6.01 -0.29 -0.50 6.51 6.39 6.35 6.61 6.45 6.44 6.03 5.96 5.95 -0.48 -0.43 -0.40 -0.58 -0.49 -0.49 Change from: April FOMC Lows July 9 Short-term rates Commercial paper 1-month 3-month Large negotiable CDs 3 1-month 3-month 6-month Eurodollar deposits 4 1-month 3-month 11.35 11.52 11.79 12.30 9.29 9.92 11.89 12.20 8.89 9.58 6.59 6.55 6.84 6.65 6.33 6.26 -0.26 -0.29 -0.51 -0.39 13.00 10.50 8.50 8.50 8.00 -0.50 -0.50 10.74 5.16 5.27 5.60 5.59 5.40 5.29 0.24 0.02 -0.20 -0.30 U.S. Treasury (constant maturity) 3-year 13.49 11.22 10-year 13.99 12.02 30-year 13.94 11.97 6.49 6.98 7.14 6.93 7.31 7.15 6.51 7.16 7.29 0.02 0.18 0.15 -0.42 -0.15 Municipal revenue 5 (Bond Buyer index) 11.44 10.25 7.55 7.91 7.64 0.09 -0.27 Corporate--A utility Recently offered 15.30 13.23 9.15 9.5 4e 9.55 0.40 0.01 14.68 12.31 1984 13.29 11.14 1985 March Lows Bank prime rate Treasury bill futures Sept. 1986 contract Dec. 1986 contract Intermediate- and long-term rates Home mortgage rates 6 S&L fixed-rate S&L ARM, 1-yr. 0.14 9.60 10.59 10.140 -0.19 0.80 8.41 8.57 8. 44 -0.13 0.03 1986 1986 Percent change from: Record FOMC Record FOMC July 9 Highs Aug. 14 July 9 Highs Lows Stock prices 1826.07 1844.91 -3.36 1.03 Dow-Jones Industrial 1086.57 1247.35 1909.03 NYSE Composite 85.13 102.46 145.15 139.55 141.79 -2.31 1.61 -0.91 285.19 273.71 271.22 -4.90 187.16 222.28 AMEX Composite 393.39 379.52 -7.70 -3.53 225.30 276.18 411.16 NASDAQ (OTC) 1. One-day quotes except as noted. 4. Averages for statement week closest 2. Averages for two-week reserve maintenance period to date shown. 5. One-day quotes for preceding Thursday. closest to date shown. Last observation is the 6. One-day quotes for preceding Friday. average to date for the maintenance period ending e--estimate August 13, 1986. 3. Secondary market. CONFIDENTIAL F.R. CLASS II - FOMC Flow of Funds Projections August 15, 1986 Division of Research and Statistics Board of Governors of the Federal Reserve System AUGUST 15,1986 DOMESTIC NONFINANCIAL DFBT DOMESTIC NONFINANCIAL Table I DEBT GROWTH RATES OF MAJOR DEBT AGGREGATES BY SECTOR ETR----------------------------------------------------0 DOETCNNIACA ---------------------------------------------------------------- - - - - - - - - - - - - -DOMESTIC NONFINANCIAL SECTORS - - - - - - - - - - - MEMO: - U.S. GOVT. TOTAL ------------------- PVT. NONFIN - - TOTAL HOUSEHOLDS - - - NONFINANCIAL BUSINESS LONG HOME CONSUMER TOTAL TERM MTGES CREDIT ANNUAL GROTH (PERCENT) ANNUAL GROWTH (PERCENT) SHORT TERM STATE & NON- LOCAL GOVTS FINANCIAL FOREIGN FINAN. ASSETS 14.2 21.2 12.2 27.2 12.5 9.4 11.1 12.7 13.6 12.1 9.5 10.5 10.5 11.0 11.2 14.9 13.0 6.6 8.3 1.1 9.8 9.7 9.1 11.4 14.1 9.4 11.0 9.9 11.7 14.2 14.4 10.9 9.2 12.8 8.2 7.4 -2.7 21.6 -15.0 1.5 12.2 14.3 11.5 15.5 12.2 14.5 11.9 15.2 1975 1976 77 -178 1979 9.2 10.7 12.8 13.1 12.1 23.7 15.5 11.0 9.4 6.0 6.1 9.5 13.2 14.0 13.6 7.2 11.7 16.3 17.0 15.1 8.8 12.6 16.9 17.5 16.1 4.5 11.4 16.2 16.9 13.5 5.3 8.4 12.4 12.8 13.6 9.2 8.9 11.1 10.5 9.9 -1.3 7.4 14.7 17.1 20.1 1980 1981 1982 1983 1984 9.5 9.5 9.2 11.6 14.7 11.9 11.8 19.4 18.8 16.9 9.0 9.0 6.8 9.7 14.0 8.9 8.3 5.6 11.3 13.0 11.4 7.9 4.8 11.1 1.2 6.0 4.5 13.6 20.0 9.7 11.1 7.6 7.7 15.4 8.7 7.6 7.1 9.2 13.2 11.2 16.6 8.3 5.5 18.7 6.2 2.3 8.5 11.4 12.2 1985 1986 1987 15.0 11.1 9.5 16.2 12.3 8.5 14.6 10.8 9.8 14.1 11.1 11.1 11.9 12.4 13.4 17.0 10.6 7.4 11.3 10.1 9.2 14.3 13.4 11.6 7.1 5.0 5.3 34.2 12.3 6.6 .6 3.9 1.7 6.5 5.0 14.0 21.5 10.3 PRIVATE QUARTERLY GROWTH (PERCENT - SAAR) 1984 -- I II III IV 1985 -- I II III IV 1986 -- I II III IV 1987 -- I II III IV 12.9 14.0 12.7 16.1 14.7 14.0 15.4 19.5 12.3 14.0 11.9 15.1 11.2 14.0 11.2 13.2 10.5 11.9 10.1 10.3 16.9 23.4 17.0 17.3 14.6 15.7 12.3 15.8 9.5 12.3 12.9 15.6 22.3 20.6 11.4 16.0 11.4 12.6 12.7 20.2 10.5 15.7 11.5 23.8 11.6 11.7 13.1 19.1 11.7 11.5 14.8 15.8 9.4 10.4 13.1 12.7 18.7 15.1 18.0 12.2 11.0 10.2 8.9 13.3 12.4 13.8 12.2 16.0 9.0 5.0 4.2 9.3 14.8 20.4 25.6 62.8 -1.3 -1.3 4.7 .3 10.9 12.1 12.4 19.5 10.9 10.1 11.9 16.0 8.7 11.3 12.0 10.7 7.5 14.8 11.7 13.0 9.1 10.2 12.1 10.0 8.1 11.0 11.8 11.9 7.0 11.8 14.4 14.1 11.1 11.8 9.4 8.7 11.2 9.0 9.3 9.3 14.0 13.5 11.5 12.1 7.0 2.0 5.8 4.8 4.5 12.4 25.5 4.9 8.8 8.1 -1.3 .1 8.7 11.2 11.6 10.3 5.7 8.5 9.6 7.8 9.7 9.2 9.1 8.6 9.4 8.0 8.4 7.0 9.8 9.6 9.3 9.1 11.0 10.7 10.5 10.4 13.2 13.0 12.5 12.3 7.9 7.3 7.1 6.7 9.5 9.1 8.7 8.3 11.9 11.3 10.8 10.5 5.5 5.5 5.0 4.6 6.6 6.4 6.4 6.4 1.6 1.5 1.7 2.0 9.5 9.0 8.8 8.4 7.5 7.6 6.8 6.9 HIGHLIGHT': i'abio HIGHLIGHTS 2: FLOW OF FUNDS PROJECTIONS' HIGHLIGHTS QUARTERLY, AT ANNUAL RATES QUARTERLY, AT ANNUAL RATES C A L E N D A R Y E A R S I 1984 1985 1986 1987 I NET FUNDS BORROWED BY DOMESTIC 1 NONFINANCIAL SECTORS 2 PER CENT OF GNP I%) 1986 I II III IV I I 1987 I II III IV 765.9 20.3 898.2 22.5 765.6 18.2 723.9 16.2 601.9 14.5 794.8 19.0 869.7 20.5 795.8 18.5 744.5 17.1 720.5 16.3 727.0 16.2 703.5 15.4 1 2 187.4 76.0 207.5 28.9 122.0 20.6 132.3 19.7 147.2 37.4 73.9 14.4 138.8 15.8 128.1 14.9 131.8 19.7 132.2 19.9 131.9 19.6 133.4 19.4 3 4 24.4 23.1 15.7 18.2 23.6 9.1 16.0 16.1 17.6 18.3 18.0 18.8 5 59.5 17.9 19.2 42.7 31.5 9.5 13.6 22.2 34.5 40.4 45.5 50.3 6 93.0 -50.0 115.3 27.7 BANK CREDIT - F/F BASIS: 3 4 TOTAL BUSINESS LOANS 5 PERCENT OF TOTAL FUNDS BORROWED (1) NONFINANCIAL CORPORATE BUSINESS: 6 FINANCING GAP (2) 7 8 9 10 NET FUNDS RAISED IN MARKETS NET EQUITY ISSUES BONDS AND MTGS. ST PAPER AND OTHER DEBT 115.6 -77.0 66.0 126.5 85.6 -81.6 99.4 67.8 76.9 -73.8 116.6 34.0 92.6 -57.5 118.0 32.1 105.7 -60.0 105.7 60.0 61.2 -75.0 132.1 4.1 63.0 -85.0 107.4 40.6 77.6 -75.0 121.2 31.4 92.2 -65.0 122.4 34.7 93.6 -60.0 117.9 35.6 91.6 -55.0 116.2 30.4 11 LIQ. ASSETS/S.T.LIABILITIES 27.4 25.8 26.1 25.5 26.2 26.3 26.1 25.9 25.8 25.6 25.5 NET ACQUISITION OF DEPOSITS AND CREDIT MARKET INSTRUMENT 424.6 DEPOSITS 298.7 CREDIT MKT.INSTRUMENTS (3) 126.0 364.3 179.4 184.9 278.7 235.3 43.5 309.3 237.2 72.1 185.2 236.4 -51.2 296.0 223.0 73.0 297.4 242.7 54.6 336.4 238.9 97.5 313.1 281.0 32.1 326.3 247.2 79.1 12.9 6.3 6.5 9.3 7.9 1.5 9.8 7.5 2.3 6,3 8.1 -1.7 9.9 7.5 2.5 9.9 8.1 1.8 11.1 7.9 3.2 10.1 9.1 1.0 10.4 7.9 2.5 25.3 11 HOUSEHOLDS: AS PERCENT OF DPI: NET ACQUISITIONS (L. 12) DEPOSITS (L. 13) CR.MKT.INSTRUMENTS (L. 14) 15.9 11.2 4.7 (1) TOTAL IN THIS RATIO INCLUDES FOREIGN BORROWING IN THE U.S. (2) EXCESS OF CAPITAL EXPENDITURES OVER GROSS CASH FLOW (3) EXCLUDES CORPORATE EQUITIES 293.5 189.6 103.9 9.2 6.0 3.3 304.4 231.0 73.4 9.4 15 7.1 16 2.3 17 AUGUST 15, 1986 Funds Raised Funds Raised Table 3 Funds Raised in Credit Markets SEASONALLY ADJUSTED ANNUAL RATES SEASONALLY ADJUSTED ANNUAL RATES I 1985 I 1987 I III IV I 1986 I II 1987 I III IV I 1984 1985 1986 Net borrowing in credit markets by domestic nonfinan. sectors 765.9 898.2 765.6 723.9 809.9 1323.4 601.9 794.8 869.7 795.8 732.5 715.2 1 U.S. Government 198.8 223.6 196.5 152.1 168.5 358.(1 119.5 241.6 198.6 226.2 158.1 146.2 2 P 'te domestic nonfinan. State + local govts. 567.1 45.0 674.5 140.9 569.1 67.9 571.7 41.0 641.4 115.0 964.6 300.2: 482.4 24.8 553.2 69.4 671.1 147.0 569.6 30.2 574.4 40.6 569.1 41.4 3 4 Nonfinancial business Bonds + mortgages Loans + short-term paper 283.4 145.7 137.7 241.8 180.4 61.4 237.3 190.9 46.4 238.7 187.2 51.5 201.4 163.6 37.8 305.4 220.9 84. 5; 264.8 199.7 65.1 218.0 199.2 18.8 230.8 175.5 55.3 235.5 189.1 46.4 244.0 189.6 54.3 233.4 184.8 48.6 Households Home mortgages Consumer credit Other 238.8 130.0 94.8 14.0 291.9 152.6 96.6 42.7 263.9 180.1 70.9 12.9 292.1 218.7 54.8 18.6 324.9 176.9 111.2 36.8 359.01 177.2: 78.8; 103.01 192.7 102.4 73.9 16.5 265.7 175.5 80.8 9.5 293.3 219.7 66.4 7.2 303.9 222.7 62.7 18.5 289.9 217.0 56.5 16.3 294.3 220.4 53.0 20.9 Net foreign borrowing in U. S. credit markets Total, all nonfin. sectors 2.8 768.7 1.5 899.7 9.8 775.3 4.2 728.1 11.5 821.3 .8 1324.2 22.0 623.9 20.0 814.8 -3.2 866.5 .3 796.2 3.9 736.3 4.6 12 719.9 13 Net credit market borrowing by financial sectors 138.2 193.7 208.4 204.4 210.0 230.2 154.9 231.3 230.1 217.2 206.0 202.7 14 H1 H2 Sponsored credit agencies Mortgage pool securities Pr. te finance Ni ;redit market borrowing by all sectors 30.4 44.4 63.3 21.7 79.9 92.1 14.2 128.9 65.3 30.4 120.4 53.6 4.2 87.3 118.6 30.4 99.0 100.8 3.6 95.0 56.3 5.1 147.2 78.9 21.2 138.7 70.2 26.8 134.7 55.7 30.0 121.6 54.5 30.8 15 119.1 16 52.8 17 906.9 1093.4 980.9 930.5 1031.4 1554.4 777.1 1040.3 1094.5 1011.7 940.4 920.6 18 Borrowing as per cent of GNP: Domestic nonfinancial By U.S. Govt. By private domestic nonfin. 20.3 5.3 15.1 22.5 5.6 16.9 18.2 4.7 13.5 16.2 3.4 12.8 20.1 4.2 15.9 32.4 8.8 23.6 14.5 2.9 11.6 19.0 5.8 13.2 20.5 4.7 15.9 18.5 5.3 13.3 16.7 3.6 13.1 15.8 19 3.2 20 12.6 21 AUGUST 15, 1986 Funds Advanced Funds Advanced Table 4 Funds Advanced Directly in Credit Markets ASONALLY ADJUSTED ANNUAL RATES SEASONALLY ADJUSTED ANNUAL RATES ------------------------------------------------------------------------------------------------------------------------------I 1985 I 1986 I 1987 1984 1985 1986 1987 I III IV I I II III IV I H H2 ---------------------------------------------------------------------Net direct lending To nonfinancial sectors To financial sectors 906.9 768.7 138.2 1093.4 899.7 193.7 980.9 775.3 208.4 930.5 728.1 204.4 1031.4 821.3 210.0 1554.4 1324.2 230.2 777.1 623.9 154.9 1040.3 814.8 231.3 1094.5 866.5 230.1 1011.7 796.2 217.2 940.4 736.3 206.0 920.6 719.9 202.7 555.6 555.2 584.8 545.3 581.9 737.8 591.3 569.3 628.8 549.8 542.3 548.3 4 Commercial banking 181.7 196.6 122.3 131.7 191.5 312.2 120.1 103.4 138.2 127.5 131.4 131.9 5 Thrift institutions Insurance + pension funds Other private finance 146.3 119.0 108.6 86.0 125.2 147.4 112.0 130.3 223.0 126.2 136.5 152.9 146.1 137.1 107.2 83.5 160.2 181.8 66.2 108.5 298.2 111.8 147.2 212.6 143.8 131.1 217.8 126.2 134.4 163.5 123.0 135.5 154.3 129.4 137.4 151.6 U.S.Government related Direct Sponsored agencies Mortgage pools Federal Reserve 98.8 17.1 28.8 44.4 8.4 140.7 17.4 21.7 79.9 21.6 170.6 10.3 16.4 128.9 15.0 167.7 4.5 30.9 120.4 11.9 115.8 25.6 19.8 87.3 -16.8 161.6 7.9 5.0 99.0 49.6 96.0 12.1 -4.2 95.0 -6.9 206.4 16.5 19.4 147.2 23.2 176.6 3.2 19.5 138.7 15.3 203.5 9.4 31.1 134.7 28.3 165.0 4.3 30.7 121.6 8.4 170.3 4.6 31.0 119.1 15.5 Foreign 45.9 75.7 114.3 95.6 96.8 99.6 97.5 124.3 105.4 130.0 128.9 Households Nonfinancial business State+local governments 126.0 30.8 49.9 184.9 3.2 133.7 43.5 2.1 65.5 72.1 .8 49.1 110.5 11.8 114.5 265.9 18.4 271.1 -51.2 12.4 31.0 73.0 4.7 62.4 54.6 -7.9 137.0 97.5 -.7 31.7 55.6 -.5 49.1 88.7 15 2.1 16 49.0 17 of total advances Commercial banking Total private finance U.S.Government related to nonfinancial sectors: 23.6 21.9 72.3 61.7 12.8 15.6 15.8 75.4 22.0 18.1 74.9 23.0 23.3 70.9 14.1 23.6 55.7 12.2 19.2 94.8 15.4 12.7 69.9 25.3 15.9 72.6 20.4 16.0 69.1 25.6 17.8 73.6 22.4 18.3 76.2 23.7 to finance 62.3 14 Net Issues of Corporate Equities Total net equity issues Domestic nonfinancial corp. Domestic financial corps. Foreign net sales to U.S. Net purchases by: Households Foreign Finance -33.6 -77.0 42.3 1.1 32.9 -81.6 110.6 4.0 117.8 -73.8 186.0 5.6 98.5 -57.5 152.3 3.8 29.6 -75.0 100.6 4.0 50.6 -100.0 147.4 3.2 181.6 -60.0 233.2 8.4 113.4 -75.0 186.4 2.0 89.4 -85.0 168.4 6.0 86.9 -75.0 155.9 6.0 94.5 -62.5 152.1 4.9 102.6 -52.5 152.4 2.7 -41.2 -2.7 10.3 -15.7 4.7 43.8 51.5 20.2 46.2 24.7 14.3 59.6 -14.3 7.7 36.2 22.3 16.7 11.6 99.0 22.7 59.8 47.3 23.0 43.1 46.0 18.0 25.5 13.6 17.0 56.3 21.6 15.5 57.4 27.8 13.0 61.7 1 2 3 4 

Federal Reserve (1986, August 18). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19860819_part2

@misc{wtfs_greenbook_19860819_part2,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1986},
  month = {Aug},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19860819_part2},
  note = {Retrieved via When the Fed Speaks corpus}
}