October 1954
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OCTOBER 1954 U. S. DEPARTMENT OF COMMERCE OFFICE OF BUSINESS ECONOMICS SURVEY OF CUHMENT BUSINESS DEPARTMENT OF COMMERCE FIELD SERVICE Albuquerque, N. Mex. No. 10 208 U. S, Courthouse UUA S. Broadway OCTOBER 1954 Atlanta 5. Ga, Memphis 3, Twin. 50 Seventh St. ML Boston 9, Mass. Miami 32, Fla. U. S. Post Office and 36 NE. First St, Courthouse Bldg. MfameapoHs2tMmn. Buffalo 3, N. Y. 607MarqoetteAre. 117 Ellicott Sti Charleston 4, S. C, Area 2, Sergeant Jasper Bldg. PAGE New York 17. N.Y. 110E.4Sth! THE BUSINESS SITUATION 1 Cheyenne, Wyo, 307 Federal Office Bldg. Philadelphia 7. Pa. National Income and Corporate Profits, Chicago 6, 111. 226 W, Jackson Blvd. Phomix.Ari,, Cincinnati 2, Ohio 137 N. Second Are. 422 U. S. Post Office and Courthouse 107 Sixth St, SPECIAL ARTICLES Cleveland 14, Ohio 1100 Chester Ave« 520 SW. Morrison St. Foreign Grants and Credits Dallas 2, Tea. U. S. Government, Fiscal 1954, 7 Reno,Ner. 1114 Commerce St. 1479 V«lh Are. Private and Public Debt in 1953, 13 Denver 2, Colo, Richmond 20, Va. 142 New Custom House WON.LomhardySt. Detroit 26, Mich, St. Louis 1, Mo. 230 W, Fort St. 1114 Market St, El Paso, Tex. Salt Lake Cit7l, Utah Chamber of Commerce 222 SW. Temple St. MONTHLY BUSINESS STATISTICS . S-l to S-40 Bid*. Houston 2, Tex. San Francisco U, Calif. Statistical Index . Inside back cover 430 Lamar Ave. 555 Battery St. Jacksonville 1, Fla, Sarannab. Ga. 311 W, Monroe St. 125-29 BullSt. Kansas City 6, Mo, Seattle 4, Wash. 911 Walnut St. 909 First Are. Published by the U. S. Department of Commerce, SINCLAIR WEEKS, Secretary. Office of Business Economics, M. JOSEPH MEEHAN, Director. Subscription price, including weekly statistical supplement, U $3.25 a year; Foreign, $4.25. Single copy, 30 cents. Send remittances to any Department of Commerce Field Office or to the Superintendent of Docu* For local telephone listing* contub section ments, United States Government Printing Office, Washington 25, D, C, dvmted to U. S. Government Special subscription arrangements, including dianges of address, should be made directly with the Superintendent of Documents. Make checks payable to Treasurer of the United States. OCTOBER 1954 By the Office of Business Economics JLJUSINESS activity remained on an even keel in the late E>V\PLOYMENT summer and early fall period with seasonal increases occurring in production, employment and consumer buying. Con- In trade and service industries has been struction activity in September, seasonally adjusted, reached generally stable ..« a new high—continuing the strength shown in the other months of this year. MIL yONS^OF PERSONS Employment expanded in nonagricultural establishments 12 in September as school hiring rose to accommodate record enrollment, labor disputes in the rubber and lumber indus- tries were settled, and workers were added to meet seasonal ^ TRADE demands in manufacturing and trade. Personal income, still the basic support of private demand, FINANCE AND SERVICES . has continued at a high and even rate. The slight decline 8 from July to August was ascribable mostly to a corresponding ~ reduction in wages and salaries in the commodity-producing industries. As indicated in the chart, the chief shrinkage in 7 ~~ GOVERNMENT "" employment during the past } ear has occurred in these industries. September sales at retail stores increased by the usual 4 amount from August. For the third quarter as a whole, TRANS PORT ATI ON AND retail sales, seasonally adjusted, were equal to the second- PUBLIC UTILITIES quarter rate and also equal to the third quarter of 1953. Consumption exceeds production 0 i , i t i i i . i i i I i i i i i 1 i t i i i 1 i i i i i 1 i i i i I The volume of final aggregate demand for consumption, fixed investment and for Government-required goods and while in the commodity producing industries, services continues in excess of production. This means that excepting construction, it has been reduced inventories held by business concerns are still being liqui- dated, and mainly so in the durable goods manufacturing 12 industries. DURABLE MANUFACTURES In recent months, the reduction of inventories in produc- tive and distributive channels has been accompanied by a relatively stable volume of sales. As a consequence, stock- sales ratios have been lowered—about 6 percent from this year's February high. The current ratio of about one and two-thirds months for manufacturing and trade combined is about the same as a year ago. The recent improvement in inventory-sales ratios has been NONDURABLE MANUFACTURES ~~ more marked in manufacturing than in trade, and more pronounced in durable goods lines than in nondurables. Based on seasonally-adjusted data, manufacturers and re- 4 CONTRACT CONSTRUCTION "~ tailers of durable goods have reduced stock-sales ratios by \ 5 and 12 percent, respectively, from late winter highs; for durable-goods wholesalers the change has been more mod- erate. The reduction in motor vehicle dealers7 holdings has MINING been an important factor in the retail movement. Stock-sales ratios for nondurable-goods firms in manufac- 0 1 i i i i 1 i i i t 1 1 t i t i i 1 i i i i i 1 i i i i t 1 i t i i i turing and trade have edged down only moderately this year. 1952 1953 1954 Soft-goods inventories had not advanced in proportion to SEASONALLY. ADJUSTED -' ' ; sales during the previous 2 years so that current positions, ' , , DATA; f£6. Kg*. $0. , relative to sales, are more favorable than for durables. ST'HOF etvs«VESS Eco/voM/trs, u, ^ a c. f > •- t . ... *:$4~$9'~/ Late summer stock-sales ratios for both manufacturers and 315021°—54 1 2 SURVEY OF CURRENT BUSINESS October 1954 distributors of noiidurables were about the same as a year casioned by large-scale shutdowns for model changeovers and inventory adjustments for many makes of cars. While Analysis of manufacturers' inventories by stage of fabrica- further shutdowns for these purposes are scheduled for Octo- tion indicates that the relatively more favorable inventory ber, production programs indicate substantial increases for position of nondurable-goods industries than of the durable- the months ahead. goods industries centers in finished goods and goods-in- Sales of new passenger cars have been following a down- process. Nondurable-goods stocks in these categories are ward pattern more in line with prewar seasonal fluctuations slightly lower than in the corresponding period of last year. than was the case in earlier postwar years. Dealer sales in For durable-goods producers, goods finished and available September lagged behind the July-August rate; but since for shipment are larger relative to current sales volume than they were well above factory assemblies, dealer stocks have a year ago. Goods-in-process inventories bear about the continued to decline and at month-end stood considerably same relation to sales as in the summer of 1953, though below 1953. considerably higher than in the pre-Korean period due to the Plants producing railroad equipment are operating at low relatively large percentage of defense material in the product levels as a result of the dearth of new orders and backlogs. mix. In the most recent months, however, new orders have Purchased materials held by both durable-goods and matched or even slightly exceeded shipments so that back- nondurable-goods manufacturers have been reduced quite logs, while the lowest of the postwar period, have shown sizably—bringing their ratios to sales to about the lowest signs of leveling off. points in recent years. For major household appliances demand has been rela- tively firm in 1954. Production in these lines has advanced Production trends since the first quarter. Stocks in the hands of manufacturers at the end of August were on the average somewhat below Industrial production so far this year has been on a year-ago volumes and were not high in relation to current plateau, at a rate 9 percent below the peak second quarter shipments. of 1953 but about as high as the average for 1952. The In the case of television sets, slightly larger sales to con- Federal Reserve Board's seasonal!}' adjusted production sumers so far in 1954 as compared with 1953, coupled with index has fluctuated within a narrow range of about 2 index a substantial drop in output, has resulted in a sharp inventory points on a monthly basis, with an average of 124 for each reduction since the beginning of the year. of the first 3 quarters of this year. In late September and early October there was evidence of some pickup in opera- tions in a few of the basic industries. Nondurable goods stable The production pattern during the year to date has been one of divergent trends for individual commodities, but In nondurable manufacturing, where the downward adjust- these variations have been less pronounced than in the last 6 ment was less pronounced than in the durable goods indus- months of 1953. Oupput of durable goods as a whole de- tries, production has remained steady since March at a rate clined through March arid since has shown little or no moderately above the first quarter, though still 5 percent change, while production of nondurable manufactures firmed below the high April-June period of 1953. Production up in the second quarter and has since held steady at the trends have varied, however, among the individual indus- moderatly higher rate. tries. Food and beverages and the printing and publishing In general, quarterly production movements among industries, two typically stable groups, have shown little or individual industries and products during the first 9 months no change.