Survey of Current Business September 1960
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SEPTEMBER 1960 survey of CURRENT BUSINESS U.S. DEPARTMENT OF COMMERCE OFFICE OF BUSINESS ECONOMICS SURVEY OF CURRENT BUSINESS SEPTEMBER 1960 VOL. 40, NO. 9 U.S. Department of Commerce Frederick H. Mueller, Secretary Office of Business Economics M. Joseph Meehan, Contents Director BUSINESS REVIEW PAGE Summary , I Louis J. Paradise Business continues high, with income steady—Final demand up— Managing Director Inventory adjustment proceeds—Employment steady. Varied Retail Markets—Review of Differential Movement of LoughJin F. McHugh K. Celeste Stol Business Review Editor Statistics Edit< Store Sales 3 Housing Construction and Financing. 4 Billy Jo Dawkins Activity off from high—Shift in new house financing—Lending and Graphics interest rate trends. STAFF CONTRIBUTORS DEVELOPMENTS IN MAJOR MARKETS TO THIS ISSUE Capital Investment Higher—Analyses of Current Tendencies. 6 Business Review and Features: Shifts in manufacturing investment 7 Clement Winston L. Jay Atkinson Nonmanufacturing programs at peak 8 Capital Investment: Balance of International Payments—Larger Trade Receipts Murray F. Foss Offset by Capital Outflows 9 Balance of Payments: Merchandise exports higher 10 Walther Lederer Imports remain steady II Article: Financial movements analyzed 14 Samuel Pizer Frederick Cutler ARTICLE Julius N. Freidlin Bertil Renborg Foreign Investments—Summary and Analysis of Recent Christopher M. Douty Census: Current Trends and Economic Effects 15 James Lopes Growth of U.S. direct investments abroad 15 Edmund L. Auchter Production abroad by direct investment enterprises 17 Private portfolio investment abroad 23 Subscription prices, including weel Foreign investment in U.S.—Summary 24 statistical supplements, are $4 a year J Assets held in the U.S 24 domestic and $7.50 for foreign mailing. Sin| issue 30 cents. MONTHLY BUSINESS STATISTICS Make checks payable to the Superintende of Documents and send to U.S. Governmc General , S1-S24 Printing Office, Washington 25, B.C., or Industry S24-S40 any U.S. Department of Commerce Fi< Subject Index Inside Back Cover Office. U.S. DEPARTMENT OF COMMERCE FIELD OFFICES Albuquerque, N. Mex., 321 Post Office Bldg. Denver 2, Colo., 142 New Custom House. KEystone Philadelphia 7, Pa., Jefferson Bldg., 1015 Chestnut St. CHapel 7-0311. 4-4151. WAlnut 3-2400. Atlanta 3, Ga., 604 Volunteer Bldg., 66 Luckie St., N.W. Detroit 26, Mich., 438 Federal Bldg. WOodward 3-0330. Phoenix, Ariz., 137 N. Second Ave. ALpine 8-5851. JAckson 2-4121. Greensboro, N.C., 407 U.S. Post Office Bidg. Pittsburgh 22, Pa«, 107 Sixth St. GRant 1-5370. Boston 9, Mass., U.S. Post Office and Courthouse Bldg. B Road way 3-8234. CApitol 3-2312 or 2313. Portland 4, Oreg., 217 Old U.S. Courthouse Bldg. Buffalo 3, N.Y., 604 Federal Bldg., 117 Ellicott St. Houston 2, Tex., 610 Scanlan Bldg., 405 Main Street. CApital 6-3361. MAdison 4216. CApitol 2-7201. Reno, Nev., 1479 Wells Ave. Phone 2-7133. Charleston 4, S.C., Area 2, Sergeant Jasper Bldg., West Jacksonville 1, Fia., 425 Federal Bldg. ELgin 4-7111. Richmond 19, Va., Room 309 Parcel Post Bldg. Milton End Broad St. RAymond 2-7771. Kansas City 6, Mo., Room 2011, 911 Walnut St. BAlti- 4-9471. Cheyenne, Wyo., 207 Majestic Bldg., 16th St. and more 1-7000. St. Louis 1, Mo., 910 New Federal Bldg. MAin 1-8100. Capitol Ave. Phone: 8-8931. Los Angeles 15, Calif., Room 450, 1031 S. Broadway. Salt Lake City 1, Utah, 222 SW. Temple St. EMpire Chicago 6, 111., Room 1302, 226 W. Jackson Blvd. Richmond 9-4711. 4-2552. ANdover 3-3600. Memphis 3, Tenn., 212 Falls Bldg. JAckson 6-3426. Cincinnati 2, Ohio, 915 Fifth Third Bank Bldg., 36 E. San Francisco 11, Calif., Room 419 Customhouse. Fourth St. DUnbar 1-2200. Miami 32, 14 NE. First Avenue. FRanklin 7-2581. YUkon 6-3111. Cleveland 1, Ohio, Federal Reserve Bank Bldg., E. 6th Minneapolis 1, Minn., 319 Metropolitan Bldg. FEderal Savannah, Ga., 235 U.S. Courthouse and P.O. Bldg. St. and Superior Ave. CHerry 1-7900. 2-3211. A Dams 2-4755. New Orleans 12, La., 333 St. Charles Ave. EXpress 2411. Dallas 1, Tex., Room 3-104 Merchandise Mart. River- Seattle 4, Wash., 809 Federal Office Bidg,s 909 First Ave. side 8-5611. New York 1, N.Y., Empire State Bldg. LOngacre 3-3377. MUtual 2-3300. By the Office of Business Economics BUSINESS activity continued high employees, there has also been some August of last year. The annual rate in August with little change from July, leveling tendencies in defense outlays of personal income in mid-quarter, after allowing for the usual seasonal which earlier had a downward tilt. noted in the opening paragraph, is movements. Personal income at a more than 6 percent above a year ago, Income flow little changed $407% billion annual rate compared and nearly 2 percent above the average with $383^ billion a year ago, was The flow of personal income in of the first half of this year. virtually the same as in the preceding August was about the same as in July, Compared with a year ago, income month. Consumer buying also moved following continued advances since in August was up $24 billion at an in similar fashion in August, matching the July figure. Manufacturing em- BUSINESS HIGHLIGHTS ployment and output were off a little, and elsewhere activity was well main- INVESTMENT: Plant and Equipment Outlays CONSUMER BUYING of Nondurable tained. Up Substantially This Year Goods Continues Strong Final purchases have increased fur- Billion Dollars Billion Dollars ther in the current quarter, but the "I 14 rise has been less than the large advance 40 marked up in each of the initial two 12 quarters of the year. Plant and equip- ment investment, and purchases of 30 services by consumers and governments 10 0 Anticipated were the segments moving ahead. Quarterly - Annual Rates Exports have extended the advance 20 , I I I I I I I I I I i i I I which has characterized the year to CONSUMER BUYING of date. Consumer buying of nondura- INVESTMENT: Housing Off This Year Durable Goods Easing bles was steady, while purchasing of 1959=100 Billion Dollars durable goods eased. 125 8 Continuing the tendency in evidence UNITS STARTED during the spring months, inventory 100 accumulation has been tapering since mid-year and in some industries, par- ticularly durable goods manufacturing, 75 inventories have been reduced. The Monthly stimulus to sales and activity provided 50 by the large inventory buildup earlier in the year is now largely gone. Hous- INVESTMENT: Inventory Rise Has Slackened EXPORTS Up but Payments Balance Large ing construction—both as reflected by Billion Dollars Billion Dollars. expenditures and starts—is lower than 40 MANUFACTURING AND TRADE INVENTORIES BALANCE OF INTERNATIONAL 100 a year ago. (Book Values) PAYMENTS OF U.S. Government buying continues to 35 show upward tendencies, primarily re- U.S. Payments Abroad flecting the moderate but steady expan- 90 sion of State and local government 30 programs. Payrolls for teachers and Net Payments 80 other public workers continued upward. 25 Federal Government purchases, which U.S. Receipts From Abroad Monthly Quarterly -Annual Rates had been tending slightly downward 70 I I II ! I I I I I I III 1 I I I i I I I I I J [_ 20 through mid-year, have more recently 1957 1958 1959 1960 1957 1958 1959 1960 advar ed moderately. While this pri- Seasonally Adjusted mariV reflected the pay raise to civilian U. S. Department of Commerce, Office of Business Economics 60-9-1 1 SURVEY OF CURRENT BUSINESS September 1960 annual rate with more than two-thirds rate and from the unusually favorable products in the three months from May of the rise coming in the form of wage results achieved in the second quarter through July, recently made available, and salary disbursements. The re- of 1959 when profits, affected by were at an annual rate of 68 million mainder reflected some gains in farm anticipatory buying incident to the tons, well below the rate of consumption income, a rise in transfer payments, and steel strike, made a sharp peak. The during this period. This represents a lesser increases elsewhere. reduction has been in manufacturing reversal of the experience in the first Since prices were up less than 2 where sales as well as margins are off. quarter when steel users were ordering percent, the 6 percent gain in income Earnings of the nonmanufacturing in- large quantities of steel for immediate this year has for the most part meant dustries made a better record. consumption and for rebuilding in- The movement of total profits has had ventories depleted during the strike NEW ORDERS AND SALES OF no direct effect on personal income, as months of 1959. MACHINERY COMPANIES dividend payments have been main- tained through August at the annual Machinery strong rate—close to $14 billion—established Machinery continues to record a Billion $ last winter. Retained earnings have strong picture. Sales and ordering of 6 moved sharply lower; the funds avail- machinery have been stable at about able to corporations from all sources, equal volume since last winter follow- however, have been sufficient to finance ing about a year and a half of rapidly the higher business investment pro- grams which are reviewed in detail in NEW ORDERS AND SALES a following section. OF DURABLE GOODS Industry movements mixed MANUFACTURING COMPANIES Expansion Other Than Machinery of Unfilled Industrial production has also held Orders relatively steady. Industries currently Billion $ showing sizable declines from earlier 12 highs are concentrated in the durable goods sector, particularly in steel and automobiles. Output in these two Expansion industries was at a fast pace in the of Unfilled early months of the year and exceeded Orders final use.