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) FOMC CLASS III August 15, SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS Prepared for the Federal Open Market Committee By the Staff Board of Governors of the Federal Reserve System 1997 TABLE OF CONTENTS Page THE DOMESTIC NONFINANCIAL ECONOMY . . . . Michigan (SRC) Survey of Consumer Attitudes. . Table University of Michigan Survey Research Center: Survey of Consumer Attitudes . . . . . . ..... THE FINANCIAL ECONOMY Table Selected financial market quotations . . . . . . . . . SUPPLEMENTAL NOTES THE DOMESTIC NONFINANCIAL ECONOMY Michigan (SRC) Survey of Consumer Attitudes According to the preliminary report, the Michigan SRC index of consumer sentiment fell back in August, but it remained at an extremely favorable level after recording historical highs in June and July. Indeed, despite less favorable assessments of their current financial situations and expected business conditions, those components of the index in early August remained generally above the levels during the first five months of the year. Respondents' views on their personal financial situations over the next 12 months were unchanged in early August. Only households' opinions of buying conditions for large appliances dropped below the favorable level that prevailed earlier this year. Among questions not included in the overall index, the index of expected unemployment change moved back up in August but remained relatively low. Reported unhappiness with prices led to the second straight monthly decline in assessments of buying conditions for cars. However, favorable views on mortgage rates provided a further boost to appraisals of buying conditions for new homes. Households' willingness to use savings or credit to finance a major purchase slipped somewhat in early August. The mean of expected inflation over the next 12 months fell 0.2 percentage point to 3.2 percent; percentage point however, the median rose 0.1 in August to 2.8 percent. inflation over the next 5 to 10 years The mean of expected jumped 0.4 percentage point to 3.8 percent while the median moved up from 2.9 to 3 percent. August 15, 1997 UNIVERSITY OF MICHIGAN SURVEY RESEARCH CENTER: SURVEY OF CONSUMER ATTITUDES (Not seasonally adjusted) 1997 Aug (P) 1996 Dec 1997 Jan 1997 Feb 1997 Mar 1997 Apr 1997 May 1997 Jun 1997 Jul 96.9 104.9 91.8 97.4 106.8 91.3 99.7 107.2 94.9 100.0 109.8 93.6 101.4 115.2 92.5 103.2 113.5 96.6 104.5 113.2 98.9 107.1 114.0 102.6 102.8 109.3 98.5 Personal financial situation Now compared with 12 months ago* Expected in 12 months* 117 132 116 128 114 134 119 134 132 130 122 138 126 131 130 133 123 133 Expected business conditions Next 12 months* Next 5 years* 130 107 136 103 135 113 138 105 130 113 142 109 147 121 151 130 149 114 Appraisal of buying conditions Cars Large household appliances* Houses 134 155 156 141 160 162 130 164 166 135 166 155 136 167 153 150 173 160 154 168 160 136 166 165 131 160 167 41 63 45 71 39 67 37 66 41 68 49 71 43 73 49 68 46 64 110 114 107 112 113 109 108 104 108 Mean 3.9 4.1 3.8 3.5 3.7 3.7 3.5 3.4 3.2 Median 3.0 3.0 3.0 2.8 3.0 2.9 2.8 2.7 2.8 3.9 3.0 4.0 3.1 3.7 3.1 3.6 3.0 3.6 2.9 3.8 3.0 3.9 3.1 3.4 2.9 3.8 3.0 Indexes of consumer sentiment (Feb. 1966=100) Composite of current and expected conditions Current conditions Expected conditions Willingness to use credit Willingness to use savings Expected unemployment change - next 12 months Expected inflation - next 12 months Expected inflation - next 5 to 10 years Mean Median * -- Indicates the question is one of the five equally-weighted components of the index of sentiment. (p) -- Preliminary (f) -- Final Note: Figures on financial, business, and buying conditions are the percent reporting 'good times' (or 'better') minus the percent reporting 'bad times' (or 'worse'), plus 100. Expected change in unemployment is the fraction expecting unemployment to rise minus the fraction expecting unemployment to fall, plus 100. -3Selected Financial Market Quotations' (Percent except as noted) 1997 Instrument Change to Aug. 14, from: Mar. FOMC * Jan. 2 low July 2 Aug. 14 5.79 5.27 5.63 5.05 5.14 5.28 5.04 5.17 5.37 5.48 5.47 Mar. FOMC * Jan. 2 low July 2 5.63 -0.16 0.36 0.00 5.04 5.10 5.33 5.20 5.20 5.26 0.15 0.06 -0.02 0.16 0.03 -0.11 0.16 0.10 -0.07 5.40 5.45 5.63 5.64 5.56 5.56 0.08 0.09 0.16 0.11 -0.07 -0.08 5.39 5.42 5.50 5.32 5.42 5.58 5.59 5.68 5.81 5.55 5.61 5.72 0.16 0.19 0.22 0.23 0.19 0.14 -0.04 -0.07 -0.09 5.38 5.44 5.31 5.44 5.56 5.63 5.50 5.63 0.12 0.19 0.19 0.19 -0.06 0.00 8.25 8.25 8.50 8.50 0.25 0.25 0.00 6.13 6.54 6.75 6.25 6.56 6.83 6.19 6.45 6.74 6.03 6.27 6.56 -0.10 -0.27 -0.19 -0.22 -0.29 -0.27 -0.16 -0.18 -0.18 U.S. Treasury 10-year indexed note n.a. 3.36 3.63 3.57 n.a. n.a. -0.06 5 5.96 5.97 5.82 5.71 -0.25 -0.26 -0.11 Corporate-A utility, recently offered 7.64 7.97 7.84 7.69 0.05 -0.28 -0.15 High-yield corporate 9.72 9.49 9.38 9.16 -0.56 -0.33 -0.22 7.64 5.57 7.84 5.54 7.58 5.66 7.54 5.53 -0.10 -0.04 -0.30 -0.01 -0.04 -0.13 Short-term rates Federal funds 2 Treasury bills 3-month 6-month 1-year Commercial paper 1-month 3-month Large negotiable CDs 1-month 3-month 6-month Eurodollar deposits 4 1-month 3-month Bank prime rate Intermediate- and long-term rates U.S. Treasury (constant maturity) 3-year 10-year 30-year Municipal revenue (Bond Buyer) Home mortgages 7 FHLMC 30-yr fixed rate FHLMC 1-yr adjustable rate Record high 1997 Percentage change to Aug. 14, from: FOMC * Stock exchange index Dow-Jones Industrial S&P 500 Composite NASDAQ (OTC) Russell 2000 Record FOMC * Level Date Jan. 2 July 2 Aug. 14 high Jan. 2 July 2 8259.31 8/6/97 6442.49 7722.33 7942.03 -3.84 23.28 2.84 960.32 8/6/97 737.01 891.03 924.77 -3.70 25.48 3.79 1630.44 8/6/97 1280.70 1438.25 1586.69 -2.68 23.89 10.32 420.73 8/6/97 358.96 394.13 411.87 -2.11 14.74 4.50 Wilshire 9110.42 8/6/97 7147.80 8441.43 8807.29 -3.33 23.22 4.33 1. One-day quotes except as noted. 2. Average for two-week reserve maintenance period closest to date shown. Last observation is the average to date for maintenance period ending August 20, 1997. 3. Secondary market. 4. Bid rates for Eurodollar deposits at 11 a.m. London time. 5. Most recent observation based on one-day Thursday quote and futures market index changes. 6. Merrill Lynch Master 1 high-yield bond index composite. 7. Quotes for week ending Friday previous to date shown. * Figures cited are as of the close on July 1,1997. 

Federal Reserve (1997, August 18). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19970819_part2

@misc{wtfs_greenbook_19970819_part2,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1997},
  month = {Aug},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19970819_part2},
  note = {Retrieved via When the Fed Speaks corpus}
}