Regional President Speech

ECONOMIC FORECAST FOR 1959 Before the Philadelphia Rotary Club, 59 12:30 p.m. on Wednesday, January 14, 19 Burgundy Room, Bellevue-Stratford Hotel. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Philadelphia Rotary Club, Burgundy Room, Bellevue-Stratford Hotel, Philadelphia, 12:30 p.m., Wednesday, January 14, 1959« THE BUSINESS OUTLOOK FOR 1959 MEMBER: L.H.B.M.A. - a perquisite of office. December Motto: "It's a Nice Day. Let's Louse it up Some Way." Charles Hoeflich asked me to speak informally, off the record. Hazards yet necessity to forecast. No crystal ball. Tail-end of forecasting season. 1. Agree with standard forecast - audience nothing new 2. Go out on limb to be dramatic — and probably wrong — or a scoop if right - not necessarily. — as an unknown poet reminds us: "As we approach life's gray December, These in the main are our regrets. When we're right no one remembers, When we're wrong no one forgets." Forecasting is analyzing the behavior of people — whether we like that behavior or not. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Philadelphia Rotary, p. 2 So before talking of 1959, let us look at what we as a people have been doing for the past decade. I find some basic facts have been overlooked. Where I differ from standard forecast is in the implications of these changes. Not too different for 1959* Is it a mere interlude - Between the post war explosion in population and restocking durables or a transition to something different? Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis ,7 > - GROWTH POPULATION in oROWTH POPULATION in Total North- North South West Farn Non- east Central farn J -I $0% (Xÿ 6 r * ^ at-trO' ^ fine* to*4 GROWTH IN LABOR FORCE NONFARM EMPLOYMENT 140 120 100 80 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis MANUFACTURING EMPLOYMENT MANUFACTURING 160 140 120 100 80 1948 1950 1952 1954 1956 1958 1948 1950 1952 1954 1956 1958 PRODUCTION, UNEMPLOYMENT 140 120 100 5 4 3 2 1948 1950 1952 1954 1956 1958 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis S ' LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT [Bureau of the Census estimates withoutseasonal adjustment. Thousands of persons 14 years of age and over] V iW Civilian labor force Total non- Total Employed 1 Not in the Year or month in p s o t p it u u la ti t o i n on al l f a o b rc o e r Total In nonagricul- In '! U pl n o e y m ed ­ labor force ? Total tural industries agriculture y 1945...................................... 105,370 65,140 53,860 52,820 44,240 8,580 1,040 40,230 c** 1946...................................... 106.370 60,820 57,520 55,250 46,930 8,320 2,270 45,550 \ 1947...................................... 107.458 61,608 60,168 58,027 49,761 8,266 2,142 45,850 1948...................................... 108.482 62,748 61,442 59,378 51,405 7,973 2,064 45,733 1949...................................... 109,623 63,571 62,105 “ 58,710 ... 50,684 S.tJT« 3 ,395 46.051 _ 1950................................................. 110,780 64,599 63,099 59,957 52,450 7,507 3,142 46,181 1951................................................. 111,924 65,832 62,884 61,005 53,951 7,054 1,879 46,092 1952................................................. 113,119 66,410 62,966 61,293 54,488 6,805 1,673 46,710 1953................................................. 115,095 67,362 63,815 62,213 55,651 6,562 1 ,602 47,732 1954................................................. 116.220 67,818 64,468 61,238 54,734 6,504 3,230 48,402 1955................................................. 117,388 68,896 65,848 63,193 56,464 6,730 2,654 48,492 1956................................................. 118,734 70,387 67,530 64,979 58,394 6,585 2,551 48,348 1957................................................. 120,445 70,746 67,946 65,011 58,789 6,222 2,936 49,699 1957—Nov...................................... 121,109 70,790 68,061 64,873 59,057 5,817 3,188 50,318 Dec....................................... 121,221 70,458 67,770 64,396 59,012 5,385 3,374 50,763 1958—Jan........................................ 121,325 69,379 66,732 62,238 57,240 4,998 4,494 51,947 Feb....................................... 121,432 69,804 67,160 61,988 57,158 4,830 5,173 51,627 Mar...................................... 121,555 70,158 67,510 62,311 57,239 5,072 5,198 51,397 Apr....................................... 121,656 70,681 68,027 62,907 57,349 5,558 5,120 50,975 May..................................... 121,776 71,603 68,965 64,061 57,789 6,272 4,904 50,173 June..................................... 121,900 73,049 70,418 64,981 58,081 6,900 5,437 48,851 July...................................... 121,993 73,104 70,473 65,179 58,461 6,718 5,294 48,889 Aug...................................... 122,092 72,703 70,067 65,367 58,746 6,621 4,699 49,389 Sept...................................... 122,219 71,375 68,740 64.629 58,438 6,191 4,111 50,844 Oct....................................... 122.361 71,743 69.111 65,306 58.902 6,404 3,805 50,618 Nov...................................... 122,486 71,112 68,485 64,653 58,958 5,695 3,833 51,374 • Includes self-employed, unpaid family, and domestic service workers. Note.—Information relating to persons 14 years of age and over is 2 Beginning 1957 persons waiting to start new wage and salary jobs and obtained through interviews of households on a sample basis. Monthly those on temporary layoff, previously considered as employed (with a job data relate to the calendar week that contains the 12th day; annua) but not at work), are classified as unemployed, and a small group in school data are averages of monthly figures. and waiting to start new jobs (previously included as employed) are classi­ fied as not in the labor force. EMPLOYMENT IN NONAGRICULTURAL ESTABLISHMENTS, BY INDUSTRY DIVISION [Bureau of Labor Statistics. In thousands of persons] 1950. 1,824 5,077 6,026 1951. 1,892 5,264 6,389 1952. 1,967 5,411 6,609 1953. 2,038 5,538 6,645 1954. 2,122 5,664 6,751 1955. 2,219 5,916 6.914 1956. 2,308 6,160 7.277 1957. 2,348 6,336 7,626 SEASONALLY ADJUSTED 1957—Nov. 51,758 16,455 789 2.710 4,104 11,290 2,372 6.367 7.671 Dec.. 51,516 16,252 784 2.679 4,070 11,237 2,365 6,382 7,747 1958—Jan.. 51,223 15,965 766 2,652 4,045 11,305 2,368 6.368 7,754 Feb.. 50,575 15,648 747 2,455 3,990 11,235 2.367 6,367 7,766 Mar. 50,219 15,389 733 2,573 3,930 11,116 2,360 6,330 7,788 Apr.. 50,054 15,243 723 2,624 3,890 11,050 2,356 6,352 7,816 May. 50,147 15,202 718 2.698 3.877 11,087 2,370 6,360 7,835 June. 50,315 15,275 713 2.698 3,888 11,105 2.367 6,392 7.877 July. 50,411 15,312 709 2,693 3.877 11,121 2,363 6,433 7.903 Aug.. 50,570 15,330 701 2.711 3,867 11,175 2,377 6,420 7,989 Sept. 50,780 15,529 707 2.698 3,858 11,151 2,392 6,440 8,005 Oct.. 50,586 15,369 707 2,700 3,882 11,160 2,389 6,403 7,976 Nov., 50,773 15,599 704 2.680 3,872 11,133 2,383 6,424 7,978 WITHOUT SEASONAL ADJUSTMENT 52,316 11,552^ 52,610 12,are 50,477 IV,140 49,777 10,948 49,690 10.939 49,726 10.940 49,949 10,961 50,41J 11,035 50,1^8 10,984 50f576 11,011 fl ,237 11,151 51,135 11,231 51,325 11,397 Note.—Data include all full- and part-time employees who worked family workers, and members of the armed forces are excluded. Figures during, or received pay for, the pay period ending nearest the 15th of the for October and November 1958 are preliminary. Back data may be month. Proprietors, self-employed persons, domestic servants, unpaid obtained from the Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Philadelphia Rotary, p* 6 Some implications: Teenagers and Retired people are not great Home buyers Car buyers Durable goods buyers ~ flt-f’t Returning G*I* in a hurry to establish family* Will be confronted increasingly with costs of education - which are rising* Suburbia and big cars have created needs for Streets Highways Garages Severs j . 1 4 . *T ~ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Philadelphia Rotary Net effect not great on 1959« I do not differ much from standard forecast for 1959* Incidentally, these have become more optimistic month by month« Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis g I j ó / W b t r S T i M t f T £ $ 'k . 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H ki>y a«- »do i# 7¿7fl¿ fiü£ tv ut vu di h o - A Q v ¡ - f t £ 0 i-Il /7 âtf'lîci -<4 t sir- /?îT rr f * Q i - ñ t f - t r ¿ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis t Philadelphia Rotary Objectively - on the over-all - it should be a record- breaking year in - G.N.P. Possibly in Industrial Production But it will not be a comfortable year» Nagging unemployment Dissension internationally domestically The critical second and third quarters - Steel negotiations. So prediction on Federal Reserve Policy! TiU »vc +* f S ^ u j When to stop I Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis OVER-ALL OUTLOOK GROSS NATIONAL PRODUCT Billions $_____________________________ Adjusted, Annual Rate 420 iiiiiMiM — I— I—L Index INDUSTRIAL PRODUCTION (1947-49*100) ______ Adjusted Index OONSUMER PRICES (1947-49-100) 130 « ♦Year and fourth quarter estimated o Average for the year Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis CONSUMER PERSONAL CONSUMPTION Billions $___________________________ Adjusted, Annual Rate *». 71 , AUTOMOBILE PRODUCTION Millions Annual Rate OOOOOOO Có HOUSING STARTS Millions Annual Rate ooeooo 1958* ♦Year and fourth quarter estimated Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis BUSINESS PLANT AND EQUIPMENT STEEL PRODUCTION Millions Bl 1lions $____________________________ of tons , Annual Rate Annuàl Rate CHANGE IN INVENTORIES CORPORATE PROFITS BEFORE TAXES** Billions- $_____________________________ Billions $ Adjusted, Annual Rate Adjusted, Annual Rate — 20 1958* 1958 * 1959 ♦Year and fourth quarter estimated ♦•Third quarter 1958 estimated Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Adjusted, Annual Rate ♦Year and fourth quarter estimated Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis S U M M A R Y OF B U S I N E S S F O R E C A S T S F O R 1 9 5 9 Prepared by the Research Department FEDERAL RESERVE BANK OF PHILADELPHIA. January J, 1959 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis BUSINESS FORECASTS FOR 1959 GENERAL CONSUMER BUSINESS oc vertís: :r Industrial Personal Autos HouseB Business Steel Government FORECASTS? AHD DAOK SOMART G N P Production Prices Baployment Consumption (Sales) (Starts) Outlays (Production) Profits Outlays ($ bil.) (1947-49 = 100) (1947-49 = 100) (mil.) ($ bil.) (mil.) (mil,) ($ bil.) (mil.net tons) ($ bil.) ($ Ml.) Ormnmwnt Ecoocnists; J/C 9/16/58 Steady 3-6 mos. Pull by 2nd half Forecasters Club; Oct. 1958 1st q - $1+55.5; Capital outlays: 2nd Q - $1+63; 1st d $31.5; 3rd Q - $1+67; 2nd Q $32.0; 4th Q - $1+72.5; 3rd Q $33*0; Avg. - $464.5 4th Q $34.0; (4th Q 1958 - Avg. $32.6 $448) (4th Q 1958 - $31.0) Bivln George, Director of Economic Slower rise in 1959. Rise in GBP $470 - $475 by Rise slower Lag behind Research, Sun & Bradstreet; more rapid than industrial production next summer in 1959; new recovery J/c 10/10/58 peak may occur lfcasiness Advisory Council; Majority expect continued $480 by mid­ Uncertainty due Capital outlays J/c 10/20/58 strengthening throughout next year to exhausted uncertain year government stimulants Consensus of Housing Experts Housing depends upon a boost in FHA rate and anti-inflation actions of FHB a. Jules Bactasan, Prof.,NYU "As far as housing is concerned, A neutral or a we' ve had it." minus factor, b. Arnold Chase, Head of Con­ tip to 1.15 from struction Statistics BUS 1.07 c. Willi« a tyon, Pres.,HAMSB Housing slowdown due to lack of dRimnd and tight money. d. Uilllm Doyle, Mortgage Housing drop-off - discount too Banker much for builders House & Heme. Hot. 1068 T. V. Dodge Survey of 212 Econ. Improvement in major business indi­ Rise $5 a Q. Rise faster Consumer rise Relatively slow $300 May be harmed Possible lag In Lagging profit (taken about July) cators. Characterized by steadily Hit $460 by 4th than (30?. Hit steadily; hit decline in by excessive recovery of margins ftrlldlng ftisiiwM. Hov. 1 osfi rising output and continued Inflation Q. Just as many 147 in Sec. 125.5 In Sec. number unem­ credit restric­ capital outlsys. picked $480 as (150 was popu- Wholesale up ployed tions. 1.1 rate Rise 6£ to $33 chose the lar) Rise but less than far 1st half, ($31 in 1958) median of $460 over 1958 consumer; hit 1.0T5 rate for Conatr. gain 121 by Sec. 2nd r modest Oflliersity of Michigan's Annual More gradual recovery Avg. $460 - Won't rise much.- Unemployment Ho real spree Crucial Rebuilding of Up 20%. ttodal Increase at all Conference of Economists; up 4-551 from 1$ or so to decline mystery inventories. was $47.7 levels m 11/8/58 1958. Model modestly. Avg. Modest upturn ($32.2 In 1958) was $457 unemploy. - 3*7 in capital out­ Model: to 2.2 lays In late 1959 Agriculture Department's Majority expect steady but unspec­ Increase In Indecision Rise ftitlook Conference tacular advance; record conatr. nondurables. about capital gain; inflation check Indecision outlays about durables a. Vfederal Reserve Board $470 by July 1 b. Louis Paradlso, Asst. Dir., Slowdown early in 1959 - lasting $470 by year's OS throughout year end c. WllHm Butler, Xcanoaist, Hit $493 be­ Chase Manhattan Bank fore 1959 over m 11/22/58 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 2 - GENERAL Industrial FORECASTER AND DATE StBMAHT GIF Production Prices Employment (# Ml.) (1947-49 - 100) (1947-49 - lOd (mil.) Surrey of Business Executives, Majority expect continued vigorous 38$ expect to 50% expect to fction's Business, Dec. 1958 improveasnt through 1959» 93Î raise prices; raise es^loy. j thought money and credit market 59Ì not to 48jt not to -would have no effect on 1959 plans change change. Avg. gain 2]t Sertaxd Colm, Chief Economist, NPA Probably will not reach full employ­ $1(68 - $488.5 tooting Ahead. Dec. 1958 ment level - would have to hit a by 4th Q GNP of $505 for that Conference Board Economic Forun Higher level of activity In 2nd $464 in 2nd Q 145 by June; Stability - lot quite re­ half. Optimise tinged with reser­ ($450 end of 148 by Dec. consumer up 1 turn to full vations about year'8 staying 1958) $478 In 1959; less point in each employment. power. Worried about emerging 4th Avg. gain in 2nd half. Whole­ (Unemployment inflationary psychology. $470-$475 half than GNP sale 19 1 point W Unmplqy. (in 1958 1st half, about l6jt above prices) 2 points in 2ndavg. in June and about normal in Dec. *• George Hltchings, Economist, Ford Motor Co. b. Malcolm McNair, Prof., Harvard c. Bradford Smith, Economist, U.S. Steel Miles Colean, Economist, BL5 nCB Business Outlook, 1959. Dec. 195B ...— ftrst national Bank of Chicago, Majority say conditions will show ■0 general riseSane as 1958 ^Surrey of Bankers, WSJ 12/3/5S Improvement over 2nd half of 1953 lobert Dockaon, Econooist, Univ. Several factors working against $465 ($435 Ho Mg rise, Has potential California. Chronicle 12/4/58 increased prices despite expected In.1958) rather creeping of reaching rise in production full employ­ ment Standard & Poor's I959 Annual Complete recovery & start of new $471 - up 8jt. Avg. about 146 Somewhat rtttecast, Ote Outlook 12/8/58 highs. "Golden Sixties” boom may Nay hit $480 - hit peak of greater gala start. Upsurge shows great vigor. by end of 1959 152 before end than in labor force Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis CONSUMER BUSIHESS G0viK:z::r Personal Autos Houses Business Steel Goverr.r-er.~v Consumption (Sales) (Starts) Outlays (Production) Profits Outlaws ($ bil.) (mil.) (mil.) ($ bil.) (mll.net tons) ($ bil.) ($ bil.) 85^ reached min. 48jt expect stocks for sales profits per $ expected. 52]t to of sales to expand facili­ rise; 39$ no ties change $310-$324 by Stock accwula- $96-$98by 4th Q tion *L-$3 in 4th Q 4th Q. Capital outlay $60»$62 in 4th Up k~3Í> cor $10- Higher but lag­ State & local $E5î nondur. ging. By 4th 4: hit $43.5 in $149 by 4th Q; ?l6-$17 for 4th Q., Fed. services up ÿf> constr., $25 $54.5 - up - $120 by 4th for equip., $1.5. Total Qj dur. up lOjl $1.5 inventory $98 in 4th Q - $40 by 4th Q accisn., $20 res. constr., Total $63.5 5.5-6 (tad. Reduced rate Imports)» of increase. T»5 (lnd. Tending to 0.5 laports) flatten out 105 -UO (85 in 1958) 1.2 (1*17 in 1958) Bo sharply Optl oia m 1958 mixed with sales of con­ caution sumer goods All 3 cate­ Capital out­ State and gories up; may lays up $l-$2; local iQ $3 be big year slow rise In for cars & Inventories appliances Up almost Production Stock accumu­ Total up T$i 5.5*J *306 at least 5*5 lation at $3 Fed.up 6.7% *390 in 1958) «P 3 ($5.4 decline to $56 ($52.5 Spending on In 1958). Capi­ in 1958); services & non­ tal outlsys up state & local durables con­ - Increase as up 7*6£ to tinued gradual year passes - $42.5 ($39.5 rise. Durables accent on in 1958) up - sales modernization of cars 19 of equip. sharply. Avg. Total 19 230 $117, $147.5 * to $66 ($53.5 $41.5 respec­ in 1958) tively. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 3 - G E H E B AL Industrial FORECASTER AHD DATE SUMART GIP Production Prices fiaployaent (* bil.) (1947-49 - 100) (1947-49 - 100) (mil.) Journal of Commerce. 12/9/58 Profits' rebound may slacken; will Uncertain it continue only If Industrial produc­ will hit record tion hits pre-recession level. lk7 ln 1959. May well avg. 140+ Annal Panel Discussion of Flrat latlonal Bank of Chicago a. Joseph Block, Pres. Rise steadily in 1st half and most Increasing Inland Steel Co. likely 2nd half b. Nark Cresap, Pres. Weatlnghouse Electric Corp. c. Charles KeUstadt, Pres. Ugher level of activity in 1959. Nay tun up Searr, Roebuck & Co. Consuaer in good financial shape to incur instalment debt to buy iuro^les tatlook for Business. 12/9/58 Lionel S. Edle Volune about sane as 1957; dollar *462 (*437 144 (134 in total higher than 1957 peak. 4 in 1958) - 1958) - up 7*; trend up both in dollars & voluae; up 6fl) Incon­ about same as 1st Q a little higher; next two stant dollar 1957 up aoderately from 1st; 4th Q terms sane as highest 1957 0.8. Chaaber of Coomerce Business Prospects favorable <* 5* Higher 5* Outlook Panel; WSJ 12/12/58 ftialne*« M lo/n/ifi Capital outlays vlll rise fairly TllWjfl ID »111111 vigorously as recovery goes along In early 1959 - 4.5 dtytlipA Trust Company Degree of laprovaoant likely to ♦474 (1436 0]t—X0)b higher CCHMdlty Will rise Aulnesa Bulletin. 1 ;>/l £/■;« depend on behavior of iwmwasr la 1958) - than 1958's prices up not durables, Inventories, capital out­ up 8.7* 134 ■or* than 1-50 lays, residential building fc Federal outlays William Story, Pre«., Institute 1959 «111 *bov luprnr— nt ovar °f Scrap iron * steel; 1958, but «111 not be spectacular ftronlcla. 12/18/58 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis CONSUMER B08IIIS3 OOVHOMDT Personal Autos Bouses Business Steel ¿ovaruaent Consumption (Sales) (Starts) Outlays (Production) Profits (XitlaTS (* bll.) (oil.) (all.) (* bU.) (all.net tons) (* bU.) (* bll.) Continuation of tittle evi­ Prospects are the high current dence that sub­ less reassur- rate Is haapered stantial stock Isf thin hsvt by tight aonay. rebuilding Is bean during lflBilPfntt past 6 aonths Marked gain - Seas stock 1st half 55-58; production accianilatloo; year 110-116 up 30# constr. rise (85 in 1958) as 1959 Increase progresses Acorn, of stock will start In 1st half. Slow 1st half a rise In capital record. Hoa- durables rabull&- rise steadily* log; mmm 19* Moderate gala turn In capital la durables outlays *303 (*291 la 163 (*54 in 196 (*92 la 1958) - up 1958) - up 17%. 1958) - up 14. Capital outlays Q trod iv«ard rise In 2nd half. Stock ll ^ factor 5.5 produced Nay taper off US (85 la In 2nd half 1958) das to tight Capital out­ lays gttn la njr i *f8* Household dur­ Off so mch is tlfcaly <(0 gBlH* Stock 1 110 federal up at ables up - hut 1958 that sub­ Dollar Is* latlon *4 (fl in 1958) least 7%. Total hatt building stantial re­ creases partly (-♦5.5 la 1958) 199.2 (*92 in a factor. Auto bound likely. das to greater Capital outlays. 1958) gain. *310 Output vlthln costs 1.2 lecarny pace (*290 In 1958) 5$, either «as slower than la of 5.7 19^9 or 1953. Accent on aodemlcatlaa. Riant h equip. $32 (*30 la 1958) 5.5 produced Qain In starts U5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis i - 4 - GENERAL CONSUMER BUSINESS OOVOBMETiT Industrial Personal FORECASTER AND DATE SOMARI GBP Production Prices Bnployment Consumption (* bil.) (1947-49 - 100) (1947-49 - 100) (mil.) (* bil.) l l i Hbuses Business Steel Government (Starts) Outlays (Production) Profits Outlays (mil.) (* bil.) fmll.net tans] (* bll.) (* bil.) ttieraon Schmidt, Director of Research Expansion vili continue, but possibly Rise *25 to Up Unemployment Good financial 5.5 4.3 in 1.15-1.2 Scne stock re­ tfe - but Of *6-*7 U.S. Chamber of Commerce; at a reduced rate *470-*480; not likely to condition to 1958 building; un­ uneven Chronicle. 12/18/58 *500 in i960 drop to pre- b«y durables evenness la (1450 In 4th recession constr* - seas Q 1958) levels fields up, others down; no strong expansion Gordon McKinley, Dir. of Economics Strong consumer buying and Increased Over *470; Increased Steady in Up 1.6. Unem­ Up *16 to 1.2 (includ­ Capital out­ Marked Federal up 4 Investment Research, Prudential general activity. By end, near up *34 substantially first half ployment at *307; trend ing 50.000 lays up *2; laproveMnt $3.5; atate Insurance Co. capacity operations- normal level toward public) constr up la ft local up Chronicle. 12/18/58 by 2nd half durables Outlays up 2nd half; equip, *4. fetal *1 bil. throughout year. hit *UX> Inventory ace»» mulatlon - *2.5» aostly retail national Securities & Research Further substantial gains in basic *473 144 (134 In After tax, Corp.; J/C 12/24/58 economic forces 1958) *21.5 - up 20% trm *17.8 la 1958 Eiuner Slichter; GHP will be above 1958 even If Avg. *468; Unemployment Ut to *306 Modest rise in XJt *5.0 t*m Chronicle. 12/ 2S/*58 capital spending remains unchanged hit *480 by at adj. rate business la- *92 In 1958. 4th Q of 4.0% In vest. - *2; nt *97 Dec. sow stock ac- caBilation - *3; total outlays *65*5 Assuming a strong upturn *470 147 Ttaahle *48 (*36 la 1958) ^JWtnent of Commerce' s Survey Recovery will continue Into 1959 Production up XO5-UO C*fortahle of Industries; WSJ 12/26/58 at a good pace 30% - 5.5 % lnereaae over (4.2 la 1558) 1958 fcflMSS Week. l?/?7/5fl Gradually Increasing activity; *485 bjr 4th Q; Creep hi ¿tor Ttwpl nymit *5 each far IMI tight Upturn la capi­ no major relapse *463 in 1st 4 above 3*8)1 ■mar pinch tal outljgrs la lut half not strongly fait until ■id-1959 J. A. Livingston’s Survey of Slow, steady rise *460 by Arne; 145 by June; Whole. - 119.5 tfcemplaynent: I.I9 la Asm; Cspltal out­ *°°oanistg; Bulletin 12/28/58 *471 by D#c. 149 by Dec. by Jane; 120*1 3*6 In An; 1U.5 la See. lays *32.25 by (*453 In 4th Q (■or. 141) by Dec* Cons.- 3*5 in Dec. Jtee; *33.75 by 1958) 124.2 by Jtanej Sec. (*29.? la 124.9 by Ssc. 4th 4 1958) Sfej 12/29/58 GBP rise of $10 bll. In each of Up 6* - *400 Btld do« by Thwntfl nysnt Stocks slowly 1st two 4s; then flatten out by year's end pirodagtlvHqr stay at 4*1 19. Capital la winter; ootlqrs up $L then drop to to *331 2.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 5 - G1I1IAI COHSUKBR BUSI1BS8 Industrial Personal Autos Bouses Business Steel Oovenmwnt FORECASTER ADD DATE StMMRZ GXP Production Bdees Bmloyment Consumption (Sales) (Starts) Outlays (Production) Profits (kitlays (* M l.) (1947-49 - 100) (1947-49 - 100) (mil.) (* bll.) (mil.) (ml1.) (* Ml.) fmU.net toaa) (* Ml.) (* Ml.) Itartun«. January 1959 Economy entering new high ground - **>75 " up 9% UP 12* Little change ut. Down trm re­ Inventory and hit *500 bll. In i960. 1959 "best cent high capital out­ year ever". Face of advance is 2nd rates (1.33 lays up half about half that of preceding la Bov.) 12 months. D.8. fcw* «. World Report, 1/2/59 Good times back; by late 1959 activ­ *1*80 by year's Record 150 is Consigner rise Up. Bit 66.6 *310 by 4th 4 Output up - 1.2 (1.2 in *70.2 by 4th q 112 I85.3in iftcr ttx • *99 »or 4th q ity will be considerably higher; end 4th Q (140 in less than 2% by end (64.7 (*296.5 sow); 5.5 (4.2 in 1958) (*62.1 now) 1958 *25.9 by 4th q (*94.7 now) 1st Q - better than any time of 1958; 4th of 1958) end 1958) durables up 1958), for­ (*21.6 now) 2nd Q - little higher than 1st - in­ Unemployment eign sales Avg. *24.2; ventory accumulation; 3rd Q - seme 3.5 «nd 1959 0.5 1958 - *17.9 slowing; 4th q - new highs - capital (3.9 end 1958) outlays up American Econaaic Association Recovery carried through 1st half by *470 or higher Convention (Consensus according stock accumulations and government to Business Week) spending. Mill it be enough to re­ vive capital spending which is necessary to raise econcny fclghert a. E C z h r i a c a S g o o l ; omo B n W , 1 Un /3 i / v 5 e S rsity of A *1 v ( g 8 . 0 i - n * 4 4 7 t 3 h . q 147 ' y f e u a l r l ' b s y e nd d U a u p b r o a u sm b t a l r * e t 6 s l y u ; p tfc l S ( a t - t o * i c 6 o k i n a n o c 1 f c 9 t * 5 w 8 3 - ) * 1 9 9 9 5 8 ( ) *92 in J. B u A l . l e L ti i n v . i ng 1 s / t 5 o / n 5 , 9 Financial Editor; P b r o o o s m p e i r f i t a y u . t o G o sa o l d e y s e a d r r , a g but no * * i * lt 4 4 4 f 6 7 6 io 0 3 6 i i i i n n n s 4 1 2 3 s n t r h d t d < q Q q k ; * . U 1 i 4 P n 6 g t t o a h n 1 e d 4 r 5 e c e o l r l ­ C ad o v n a s n u c m e e r m u w c o h n't w B U a o n r s n p m p l r ' l a a t o y p j d m i n e e d c n n l l e t y n i u n t a p s e . Rise D 1 e 9 r c 5 a o 9 n g c a n n y in m 1 S i s a t n r t y 2 a h d n n a e d g l c f l i ; i n n e r S i o i n t u s g t o ; e l c a k c y r a s e p w b i o u t n i a ' l l d t ­ Better Vf (*453 in 4th q after pre­ 1958) vious two re­ cessions; hit 5 in June Unemployment 5-5.25 pro- Bowsing Capital out­ Consensus of Economistsj Improve over 1958; business dotted *463 little rise .decline, but flUTilH hampered tqr lays below WSJ 1/6/59 with soft spots: unemployment, la consmer still Mgher tijiit mocmgr pre-recession housing starts, capital spending, than Immedi­ levels and fans income ately before recession Vtartbar risej tktcertaiirty levellng-oot Capital out­ State ft local G T u h a e r a G n u t a y r T a r n u t s y t Su Co r . v ; ey. Jan. 1959 O g u en t e l r o a o l k l f y o p r r o c m o i n s t i i n n g u . i ng R g i a s i e n m s ay not nam e i n n d g c a o t u l * d 4 b 7 e 5 *i»-*a.3 thsxx a c s re t a o se in­ w e i a l r l ly o c i c n u 1 r 9 59 l s a e y v s e r r a e l a b m l i l n . g * pr 3 e M se g n N t e r ra t t h a a n be as spectacular as in the 1955 *480 present rate * above by and of 1959* recovery, but this could be a by end of present rata Ted. alao above blessing, since 1955 boom produced year by end of 195£ present rate troublesome distortions Stock acwu- latlon of saw» end. Ml. * tqr and of 1959 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Bersey Rlley, Head BIS; Expects wholesale prices to rise 1 - 2 W, Dee. 27, 1958 per cent in 1959* Consumer prices to remain steady ccw raucTioB P. W. Dodge Corps Contract awards up 3$ to $35.6 billion. WSJ. Hov. 17, 1958 All major groups increasing. Tight money restraint on housing starts Cowerce St tabor Dept., Record in physical and dollar terms. WSJ. Bov. 17, 1958 Total up 7% to $52.3 billion. Mortgage money to be tight. Associated General Contractors; Expect construction to rise 6 per cent Realtors Headlines. Dec. 29, 1958 to *72 billion FBBSCBM. CCBSUMPTICH Survey of Consumer Attitudes, Consumers not in mood to go on spending University of Michigan; spree. Recovery in durables slower P.S. Hews. Dec. 12, 1958 than in 195^-1955 AUTOMOBILE SALES Stahl Bdmonda, Economist, Ford Motor Co.; Automobile sales of 5.5 million B), Bov. 8, 1958 Hans Brems, Prof., University of Illinois; Automobile sales of 6 million or more W, Bov. 8, 1958 BODSnC STARTS Albert Cole, Administrator, Bousing Same number of starts as In and Borne finance Agency; 1958 - 1.12 million. Does not expect W8J, Oct. 14, 1958 tight money to stop 1959 from being a very good year Coonerce * Labor Depts; Housing starts to be 1.2 million com­ WSJ. Bov. 17, 1958 pared with 1.17 million in 1958 Will taper off after early months because of tight money Walter Graves, Pres., BARKB; Starts win equal or exceed 1958's House k Bom. Dee. 1958 1.12 million Joseph Motoka, Pres., U.S.S.I&. League; Between 1.1 - 1.2 minion Bouse t Borne. Dec. 1958 Arthur Welmer, Economist, U.S.S.4L. League; About 1.2 million Bouse fc Home. Dee. 1958 Walter C. Belsoa, Pres., Mortgage Bankers Predieta that starts will total Aaaa. of America; 1.2 million American Banker. Dee. 24, 1958 Batlooal Aaaa. of Borne Builders1 Survey; Bxpect more starts than in 1958 0.5. lews. Dee. 26, 1958 Associated General Contractors; 8tarts will total at least Baaltors Headlines. Dee. 29, 1958 1.19 million Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis flaw imp m ubbh gpamnom McGraw-Hill Survey of Plant ft Equipment Outlays up 1% to $33 billion. Growing Spending Plans; eaphasls an BodernizatloQ W, «or. 8, 1958 SBC and Cooaerce Dept. Survey of Capital Capital outlays in first quarter $30.5 expenditures; billion coopered with $29.9 billion WSJ, Dee. 10, 1938 In fourth quarter of 1958 {BUL Steelnen's Consensus; Up 30% to 110 •1111m tons; 75Jt of BW, Hör. 1, 1958 capacity. First half best Max Howell, V.P., American Iran ft A steel eoatback year, but prospects Steel Institute; ■erred soaswhat by strike possibility WSJ. Dec. 22, I958 Production to be 100 - 110 alllioB net tons compared with 85 alllion in 1958 R.L. Gray, Pres., Araeo Steel; Expects steel production in 1959 *111 WSJ. Dec. 30, 1958 total 108 allllon net tons compared with 85 allllon In 195Ô Arthur Hewer, Pres., Bethlehem Steel; Bstlaates 1959 steel production at WSJ. Jan. 2, 1959 110 Billion tons (Puts 1950 tonnage at 85 allllon) John leudoerfer, Chairman of Board, Steel output in first half between Wheeling Steel; 55 - 58 aillion net tons. Tear output WgJ, Jan. 2, 1959 will hit UO - lié aillion tons. Placed 1958 production at 8k - 85 aillica tons ccBPOum PRcrns Federal K*serre Economists; Think that profits win soar to $50 billion W, Jan. 3, 1959 la 1959 Lewis 1. ScheUbach, Standard ft Poor's; Thinks profits Increase will probably be W, Jan. 3, 1959 Halted to less than $9 billion - or a total of $t5 billion, at best Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Karl R. Bopp (1959, January 13). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_19590114_karl_r_bopp

@misc{wtfs_regional_speeche_19590114_karl_r_bopp,
  author = {Karl R. Bopp},
  title = {Regional President Speech},
  year = {1959},
  month = {Jan},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_19590114_karl_r_bopp},
  note = {Retrieved via When the Fed Speaks corpus}
}