Survey of Current Business September 1947
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SEPTEMBER 1947 SURVEY OF CURRENT BUSINESS UNITED STATES DEPARTMENT OF COMMERCE BUREAU OF FOREIGN AND DOMESTIC COMMERCE Survey of CURRENT BUSINESS VOLUME 27, No. 9 SEPTEMBER 1947 Statutory Functions: "The Bureau of Foreign and Domestic Commerce... to foster, promote, and develop the foreign and domestic commerce of the United States" {Law creating the Bureau Aug. 23, 1912 [37 Suit. 408].], Contents Page THE BUSINESS SITUATION 1 Classification of Federal Budget Estimates, Fiscal Year 1948 3 Statistical Sections International Transactions, Second Quarter 1947 5 PaKe Business indexes S-l Business population S-3 PUBLIC AND PRIVATE DEBT IN 1946 9 Commodity prices S-3 Construction and real estate 8-5 Domestic trade 9-6 POSTWAR REGIONAL DEPARTMENT STORE SALES Employment conditions and wage*........ S-9 Finance S-15 PATTERNS 18 Foreign trade S-20 Transportation and communications S-21 Commodity sections! Chemicals and allied products •• S-23 Electric power and gas 9-25 Foodstuffs and tobacco S-26 Leather and products • 9-29 Lumber and manufactures ....• 9-30 * Metals and manufacturess STATISTICAL DATA: Iron and steel 9-31 Nonferrous metals and products 9-32 Machinery and apparatus. • 9-33 New or Revised Series 17, 24 Paper and printing 9-34 Petroleum and coal products 9-35 Rubber and rubber products S-37 Per Capita Income Payments by States, 1941-44 24 Stone, clay, and glass products 9—37 Textile products 9-38 Monthly Business Statistics S-l to S-40 Transportation equipment 9-40 Canadian statistics 9-40 Statistical Index Inside Back Cover 11 OIC3—Contents of this publication are not copyrighted and j| ( may be reprinted freely. Mention of source will be appreciated. Jr Published by the Department of Commerce, W. AVERELL HARRIMAN, Secretory—Office of Business Economics, AMOS E. TAYLOR, Director. Subscription price, including weekly statistical supplement, $3 a year; Foreign $4. Single copies, 25 cents. Make remittances direct to the Superintendent of Documents, United States Government Printing Office, Washington 25, D. C. The Chart . - PERSONAL INCOME TRENDS BILLIONS OF DOLLARS Business Situation TOTAL PERSONAL INCOME HAS CONTINUED TO RISE. 18 18 TOTAL */ By the Office of Business Economics 16 16 Advances in commodity prices and in personal incomes have highlighted recent business developments. The latter increase 14 14 flowed from recent upward changes in wage rates, as well as from the higher returns to farmers and others from the advance in prices. An increased number of veterans receiving State bonuses was also 12 12 a factor, and the cashing of terminal leave bonds by veterans will 194$ mean a substantial increment to personal incomes in September. WAGE ADVANCES, COMBINED WITH HIGH EMPLOY- Impairment of the international economic position became gen- MENT, HAVE BOLSTERED PRIVATE PAY ROLLS., erally apparent as many foreign countries were forced by depleted •' 6 , resources to curtail their purchasing in the United States, at a MANUFACTURING PAY ROLLS time when their own output was unequal to the task of making up an enlarged portion of their requirements. The sterling converti- bility provisions of the Anglo-American Financial Agreement-were suspended in August because of heavy drains of dollars from Great Britain by countries having a current export surplus with her. The drop in our exports has not to date changed the production picture, as domestic markets into which the exported products could be channeled have so far been available. 194$ t94? Value of National Output Raised The value of national output was at a higher rate in July and OTHER PRIVATE PAY ROLLS August than in the second quarter, the change reflecting in the main the rising price trend. There was, however, a sufficient gain in new construction—mostly in the residential field—to sus- tain on an even keel the total dollar volume of gross private do- mestic investment. The drop in the net balance on international account, which so far during the third quarter has been of large magnitude, was more than offset by the rise in personal consump- tion expenditures, after seasonal correction. Currently, these expenditures represent a somewhat higher proportion of the gross national product than in the second quarter. 1945 Employment fluctuations have been slight, with some increase WHILE REDUCTIONS IN PERSONNEL HAVE in the number at work in nonagricultural industries during July LOWERED GOVERNMENT WY ROLLS, and August. The volume of unemployment has been influenced by seasonal changes in the labor force—mainly the temporary GOVERNMENT PAY ROLLS entrance of school vacationers—but has continued around mini- mum levels. Paid vacations were more usual this year than last, and these had some influence upon production and shipments in particular lines where plants shut down. However, such shut- downs obviously did not occasion a decline in labor income, which in recent months has moved steadily upward. 1945 Industrial Prices Important in General Advance HIGH BUSINESS VOLUME AND PRICES HAVE BUOYED ENTREPRENEURIAL INCOME. The price advances in domestic markets have been widespread— both in food and industrial commodities—the former being broadly ENTREPRENEURIAL affected by the poor outlook for the corn crop which, through its influence upon meat and cereal prices generally, has an important impact upon the consumer's purse. The Bureau of Labor Statistics' wholesale price index rose to 154 percent of the 1926 average at the end of August, an increase of somewhat more than 4 percent from the end of June figure. Aver- age food prices were up 6 percent over this period, farm product f prices iy2 percent, and all other prices 4 percent. Among the major commodity groups, the largest rise, 9 percent, was registered by fuel 757299—47- SUEVEY OF CUKKENT BUSINESS September 1947 Chart 2.—Wholesale Prices, by Economic Groups from price rises in coal, steel, and related products, rather than from any fundamental change in the demand situation for the INDEX, 1945-100 160 I broad range of raw materials or any general worsening of the supply situation. Clearly, however, the rise in consumers' incomesi influenced the general demand picture. 150 Higher Food Prices 140 Such important foods as meats and dairy products advanced in price during the summer months while price declines were restricted to the seasonal fruits and vegetables. Among the farm products, 130 the advance was spearheaded by corn, which was selling in spot RAW AND SEMI- markets at $2.46 a bushel at the end of August, as compared with MANUFACTURED (EXCLUDING FARM / $2.07 some 2 months earlier. Wheat prices (Kansas City) rose 120 from $2.17 to $2.44 during this period. Spot cotton, on the other hand, moved counter to the general trend, falling from 37 cents a pound on June 30 to less than 33 cents at the end of August. MANUFACTURED GOODS NO (EXCLUDING FOODS) Wage Rate Increases Lift Pay Rolls 100 Upward wage rate adjustments, of prime importance in price ® ESTIMATED developments, have also become increasingly significant in aug- menting the flow of personal income in recent months. As shown in 90 I I I I I I I 1 the introductory chart in this issue, the bulk of the increase in 1945 1946 1947 personal income so far in 1947 has been in private pay rolls. The Source of data: U. S. Department of Commerce, Office of Business Economics, calculated advance in the latter, in turn, has stemmed for the most part from from wholesale price indexes of the U. S. Department of Labor, Bureau of Labor Statistics. higher wage rates, rather than from changes in the number em- ployed or the average number of hours worked. and lighting products. The July wage settlements at the coal mines The following approximate break-down for manufacturing serves resulted in advances for both anthracite and bituminous, which to indicate the relative contributions of changes in hourly earnings were soon followed by a 12-percent rise in coke prices and increases and in man-hours to higher pay rolls in comparable periods of 1946 amounting to 6 percent in petroleum products. and 1947: Important, also, in contributing to the widespread participation of industrial prices in the recent price advance were increases in steel prices in July and August which had ramifying effects Dec. 1945- Dec. 1946- June 1946 June 1947 throughout the price structure. The metal and metal products group index advanced 6 percent during these 2 months to the Percent rise in manufacturing pay rolls 14 4 Approximate points contributed by- highest point since 1920. Rise in hourly earnings 9 7 Rise in man-hours worked— 5 —3 Unfinished Goods Price Behavior Special indexes shown in chart 2 illustrate the movement of Government pay rolls edged downward during the first 7 months unfinished goods prices from VE-day, when the reconversion proc- of the year, while rents, interest, dividends, and entrepreneurial ess got under way, to the present when this phase has largely been incomes rose fractionally. Transfer payments, which had drifted passed, and productive activity is being expressed in an enlarged downward until July of this year, can be expected to rise further flow of finished goods. In the chart, the Bureau of Labor Statis- with accelerated bonus payments to veterans and the cashing of tics' wholesale price index for raw materials (with farm products Federal terminal leave bonds. removed) has been combined with the semimanufactured group to illustrate the pattern of unfinished goods price behavior relative Personal Incomes at 197 Billion Rate to finished manufactured goods (with food products eliminated). Upon the beginning of the process of liquidation of price ceilings The advance in the rate of total personal income from April to in July 1946, prices of raw and semifinished articles rose sharply, July of this year was particularly noticeable because of the com- and to a greater extent than prices of manufactured goods—as is parative stability in the income total during the preceding 5 typical in the early and middle stages of a business upsurge.