SURVEY of CURRENT BUSINESS December 1964 Local Government
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DECEMBER 1964 survey of CURRENT BUSINESS U.S. DEPARTMENT OF COMMERCE OFFICE OF BUSINESS ECONOMICS SURVEY OF CURRENT BUSINESS DECEMBER 1964 VOL. 44, NO. 12 U.S. Department of Commerce Luther II. Hodges Secretary Richard H. Holtoii Assistant Secretary for Economic Affairs Office of Business Economics George Jaszi Contents Director * * * Louis J. Paradise THE BUSINESS SITUATION PAGE Associate Director Summary • 1 Murray F. Foss Third Quarter 1964 Profits 2 Editor K. Celeste Stokes Billy Jo Hu Metal Prices, Supplies, and Consumption 3 Statistics Editor Graphics STAFF CONTRIBUTORS Expansion in Plant and Equipment Expenditures to Continue TO THIS ISSUE Into First Half 1965 5 Business Review and Features: Manufacturers9 Inventory and Sales Expectations for Early David R. Hull, Jr. Robert B. Bretzfelder 1965 • ? Francis L. Hirt The Balance of Payments—Third Quarter 1964 9 Genevieve B. Wimsatt and Staff Marie P. Hertzberg and Staff Walther Lederer ARTICLE Marie T. Bradshaw U.S. Trade With Foreign Affiliates of U.S. Firms 20 Max Lechter NATIONAL INCOME AND PRODUCT TABLES 27 Article: Samuel Pizer Frederick Cutler REVISED STATISTICAL SERIES Julius IN. Freidlin Production and Stocks of Native and Recovered Sulfur, Peter H. Zasseiihaus Murl D. Harmon 1952-62 28 Subscription prices, including weekly * * * tistical supplements, are $6 a year for mestic and $9.75 for foreign mailing. Si: MONTHLY BUSINESS STATISTICS issue 45 cents. General S1-S24 Make checks payable to tbe Supe tendent of Documents and send to Industry S24-S40 Government Printing Office, Washing D.C., 20402, or to any U.S. Departmer Subject Index *. Inside Back Cover Commerce Field Office. U.S. DEPARTMENT OF COMMERCE FIELD OFFICES Albuquerque, N. Mex., 87101, U.S. Courthouse. Phone Dallas, Tex., 75202, 1114 Commerce St. RI 9-3287. New Orleans, La., 70130, 333 St. Charles Ave. Phone 247-0311. Denver, Colo., 80202, 142 New Customhouse. Phone 527-6546. Anchorage, Alaska, 99501, Loussac-Sogn Bldg. BR 297-3246. New York, N.Y., 10001, Empire State Bide. LO 3-3377 2-9611. Des Moines, Iowa, 50309 1216 Paramount Bldg Phone Philadelphia, Pa., 19107, 1015 Chestnut St~ Phone 597- Atlanta, Ga., 30303 75 Forsyth St. NW. JA 2-4121. 284-4222 2850. Baltimore, Md., 21200, 305 U.S. Customhouse PL Detroit, Mich., 48226,445 Federal Bldg. Phone 226-6088- Phoenix, Ariz., 85025, 230 N. First Ave. Phone 261-3285 2-8460 Greensboro, N.C., 27402, 407 U.S. Post Office Bldg. Birmingham, Ala., 35203, 2030 Third Ave. N Phone Phone 275-9111. Pittsburgh. Pa., 15222, 355 Fifth Ave, Phone 644-2851 325-3131. Hartford, Conn., 06103, 18 Asylum St. Phone 244-3530. Portland, Oreg., 97204, 217 Old U.S. Courthouse Bldg Boston, Mass., 02110, 80 Federal St. CA 3-2312. Honolulu, Hawaii, 96813, 202 International Savings Phone 226-3361. Buffalo, N.Y., 14203, 117 Ellicott St. 842-3208 Bldg. Phone 588-667. Reno, Nev., 89502, 1479 Wells Ave. FA 2-7133. Charleston, S.C., 29401, No. 4 North Atlantic Wharf. Houston, Tex., 77002, 515 Rusk Ave. Phone 228-0611. Richmond, Va., 23240, 2105 Federal Bldg. Phone 649- Phone 722-6551. Jacksonville, Fla., 32202, 512 Greenl eaf Bldg. Phone 354- 3611. Charleston, W. Va., 25301, 500 Quarrier St. Phone 343- 7111. St. Louis, Mo., 63103, 2511 Federal Bldg. MA 2-4243 6196. Kansas City, Mo., 64106, 911 Walnut St. BA 1-700U. Salt Lake City, Utah, 84111, 125 South State St. Phon< Cheyenne, Wyo., 82001, 16th St. and Capitol Ave. Los Angeles, Calif., 90015, 1031 S. Broadway, Phone 524-5116. Phone 634-5920. 688-2833. San Francisco, Calif., 94102, 450 Golden Gate Ave Chicago, 111., 60604, 1486 New Federal Bldg. Phone Memphis, Tenn., 38103, 345 Federal Office Bldg. 534- 556-5864. 3214. Santurce, Puerto Rico, 00907, 605 Condado Ave. Phon 828-4400. Miami, Fla., 33130, 53 S.W. First Ave. Phone 350-5267. 723-4640. Cincinnati, Ohio, 45202, 550 Main Street. Phone 381- Milwaukee, Wis., 53203, 238 W. Wisconsin Ave. BR Savannah, Ga., 31402, 235 U.S. Courthouse and P.O 2200. 2-8600. Bldg. AD 2-4755. Cleveland, Ohio, 44101, E. 6th St. and Superior Ave. Minneapolis, Minn., 55401, Federal Bldg. Phone 334- Seattle, Wash., 98104, 809 Federal Office Bldg. MT Phone 241-7900. 2133. 2-3300. By the Office of Business Economics uauon JL/URING November the economy motor vehicle industry, they extended tories. On a seasonally adjusted basis made a considerable recovery from the to almost every major hard goods November output was still about 8 adverse effects of the strikes in the industry except iron and steel. percent below the earlier high reached automobile industry. Nonfarm em- Following the labor settlements at in midsummer. ployment, payrolls and industrial pro- General Motors plants, motor vehicle With the resumption of full pro- duction were up sharply from October, production rebounded sharply from duction schedules and with overtime and reached new peaks. The improve- October to November, but assemblies and Saturday work at most plants, ment in production, however, was not continued to be adversely affected by assemblies of passenger cars and trucks matched in final sales. Retail trade the spread of walkouts to Ford fac- reached a record high of 257,000 in the changed little from the reduced October first week of December and increased rate, chiefly because the flow of new further to 260,000 in the second week. automobiles from producers was still Schedules for the full month call for a comparatively low for the month as a Expenditures for New Plant and Equipment turnout of 1 million units, the largest whole, and November new car sales, volume for any single month in history. while up somewhat from October, were Planned outlays in first half of 1965 are 8 percent above 1964 average Fulfillment of the December estimate still depressed. would lift total vehicle output (cars Apart from the distorting influences Billion $ (ratio scale) and trucks) for the year to 9.3 million in the motor vehicle industry the under- 5Q TOTAL BUSINESS units, as compared with 9.1 million in lying trend of business is upward. An 1963. important stimulus to total output and final sales is coming from the continued 40 Personal income up large increases in business expenditures Personal income, which had risen for new plant and equipment, which 30 I I I I I I ! I I ! ! i ! i I I i [ I ! i i only $0.8 billion in October, increased are reported in more detail further on. 1960 1961 1962 1963 1964 1965 $3.3 billion in November to reach a In addition, manufacturers are making seasonally adjusted annual rate of $502 larger increments to their stocks than MANUFACTURING billion. About $2.8 billion of the in the summer quarter, as the most November increase was accounted for recent actual figures and the latest 20 by a rise in wage and salary disburse- inventory expectations survey indicate. ments, which had been unchanged the Total output in the fourth quarter will month before. Manufacturing pay- 15 be somewhat higher than in the third. rolls were up by about $2% billion, but mainly because of the dampening paced by a $1% billion rise in wages in effects in automobiles the rise will be the transportation equipment industry. clearly less than the large advances in Aside from manufacturing there were the first three quarters of this year. moderate advances in construction, distribution, and service payrolls. Rebound in industrial production NONMANUFACTURING 30 The payroll increase reflected a step- Industrial production in November up in employment, a lengthening of the more than recovered from the sharp 25 workweek and an increase in average decline in October. At approximately hourly earnings. Employment in non- 135 percent of the 1957-59 average the 20 farm establishments rose more than Federal Reserve Board index was al- 400,000 after seasonal adjustment, the most one full percentage point above largest month-to-month increase of the the previous high in September. The 15 I I I I I i i | i i i | | i i | | | i | | i i year. All major industry groups re- 1960 1961 1962 1963 1964 1965 changes over October were concen- Quarterly, Seasonally Adjusted, at Annual Rates ported employment gains, with the trated almost wholly in durable goods, o Anticipated Data: OBE-SEC largest advances taking place in manu- and while dominated by the rise in the U.S. Department ot Commerce, Office of Business Economics 64-12-1 facturing, construction, and State and 1 SURVEY OF CURRENT BUSINESS December 1964 local government. Construction em- was granted member banks to pay As of mid-December free reserves were ployment may have been favored by higher rates on savings and time de- somewhat above the levels prevailing milder-than-usual weather in Novem- posits. By month-end the 4 percent during September and October. ber. The rise in manufacturing em- discount rate was in effect at all Increases in rates permitted to be ployment was accompanied by a Federal Reserve Banks. paid on savings-type deposits at com- lengthening of the workweek (seasonally The discount rate hike was taken as mercial banks were authorized at the adjusted) from 40.5 in October to 40.9 a precautionary move to counter time of the discount rate increase to hours in November, a 9-year high. possible capital outflows that might encourage an ample flow of savings to The improved employment situation develop as a result of the larger spread be held in this country for domestic last month was accompanied by a between interest rates here and abroad investment. A number of banks have decline in unemployment. The No- and that would tend to worsen our own announced they will raise their interest vember rate—5 percent of the civilian balance of payments deficit.