by Marie T. Bradshaw and Max Lechter

Expansion in Merchandise Exports, Imports and Trade Surplus in 196B

iN 1963 the surplus of merchandise Quarterly movements vious quarters. These earlier setbacks exports over imports,1 as reflected in After shipping strike adjustments to had pared imports to a rate of $16 the U.S. balance of payments, rose to the quarterly data, exports moved billion in the January-March period, $4.8 billion, some $500 million higher steadily upward from their recent low Data for October and November in- than in 1962. This improvement was of $20.1 billion at a seasonally adjusted dicate a continuation of imports at the the result of a year-to-year expansion annual rate in the fourth quarter of high third-quarter rate. in exports of about $1.2 billion (6 1962 to a record high of $22.2 billion in Some part of the increase in the value percent) and a concurrent gain in im- the third quarter of 1963. Exports in of imports in the third quarter of 1963 ports of about $700 million (4% percent). the final quarter of the year appear to reflect eft an advance in prices, which Merchandise exports in 1963 achieved have been even higher than in the boosted the index of import unit a new record for the fourth consecutive July-Sep tember p eri o d. values to the highest level since the year, reaching a total of approximately In the third quarter of 1963 imports end of 1961. $21.7 billion. Imports, totaling about climbed to a peak seasonally adjusted Continued high surplus ivith Europe. $16.9 billion in 1963, were also at a annual rate of $17.6 billion, an exten- The Nation's $2.2 billion, trade sur- new high, the second in succession. sion of the April-June recovery which plus with Western Europe during If adjustment is made for distortions had followed declines in the two pre- caused by the shipping strikes which January- was about $100 million higher than in the comparable affected the latter part of 1962 and 7 period of 1962. In the first half of earl} - 1963, the $1,2 billion year-to-year MERCHANDISE EXPORTS, 1963 exports to that area moved above increase in exports would be raised to IMPORTS, and BALANCE the year earlier total while the corre- $1.4 billion and the improvement in the Export Surplus of About $ 4.8 billion in 1963 Was Somewhat Higher Than in 1962 sponding imports declined. Although trade surplus would be boosted to $700 As Export Rise Exceeded Import Gain opposite movements occurred during million. Annual totals for imports Billion $ the third quarter, the improvement in were relatively unaffected by the the balance with Western Europe was strikes. resumed early in the fall, when the The upswing in exports during 1963 year-to-year rise in exports far exceeded was dominated by agricultural com- the concurrent increase in imports. modities, fuel, and other basic in- During January-October 1963., the dustrial materials. This was in contrast export balance with Japan, which had to the gains in exports during 1961 and contracted sharply in 1962, also showed 1962, which had been concentrated in a 37ear-to-year improvement of some machinery, military equipment, and $100 million, as the recovery in ship- o ther fin al products. ments to Japan more than offset the The increase in imports in 1963 was still further rise in imports from that. source. largely in manufactured goods. 'Phis Based on data for the first 10 months development was also a departure from of 1963, the trade surplus with Can- the steep 1962 advance, which, follow- ada—which had declined in 1961 and ing the early recovery stage of 1961, again iu 1962—was up by little more was dominated by an upswing in than $50 million from a year ago. Al- industrial materials, and was reinforced though exports to Canada increased, by a large increase in food and other 1956 57 62 63* particularly after the middle of the goods. Quarterly Totals, Seasonally Adjusted, at Annual Rates year, imports from Canada also showed * Fourth Quarter: Estimated on the basis of October, a substantial rise. 1. Based on data for 11 months and partial data for November, and partial data for December. December. U.S. Department of Commerce, Office of Business Economics 64—1-22 The trade deficit with Latin Axnerka Digitized for FRASER 22 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis January 1964

January It KM SURVEY OF CURRENT BUSINESS 23 during the January-October 1963 period America continued to decline while the craft in 1963—the third annual drop in was somewhat greater than in the same corresponding imports edged slightly a row—reflected the fact that world period of 1962. Exports to Latin upward. demand for large jet passenger trans- ports had been very largely filled as a result of deliveries made in the previous 3 years. However, it is anticipated that the downtrend in aircraft exports will be reversed in 1964, when deliveries to foreign airlines are scheduled to increase Merchandise Exports by perhaps $75-$100 million. Deliv- eries during 1964 will include a number of short- to medium-range jet passenger Gains in Both Commercial and Government-Financed Shipments planes as well as the first exports by the U.S. aircraft industry of jet planes adaptable as cargo transports. Exports of utility and business planes are expected to continue upward. EXPORTS financed by cash payments Sales of finished goods flatten or commercial credits in the first 9 Slotver, more selective rise in ma- The termination during 1963 of the chinery months of 1963 rose to a seasonally ad- 4-year rise in exports of finished manu- justed animal rate of $18.7 billion, $540 factures (excluding finished industrial A more important development con- million higher than in the year 1962. materials) was due in part to circum- tributing to the flattening in total This increase was only moderately stances related to economic condi- exports of finished manufactures larger than the rise of about $460 mil- tions abroad. Commercial shipments during 1963 was a slowdown of the lion during the previous calendar year. of "special categoiy" commodities, rise in machinery exports. Whereas (See table 1.) which to a large extent are military the annual gains in exports of ma- The $2.7 billion annual rate of Gov- equipment, had been among the fastest chinery dining both 1961 and 1962 had ernment-financed exports during the growing components of U.S. export amounted to 9 percent, the increase in first three quarters of 1963 reflected trade in finished manufactures before January-September 1963 over a year an advance of $340 million over the 1963. They declined sharply during earlier was only about 3 percent. year 1962—a rise three times as great that year (see chart) as the responsi- (See table 2.) as the 1961-62 gain. bility for procuring and shipping such The rise in machinery exports during Although Government-financed ship- items was gradually shifted to the the past year, moreover, was very ments comprised only 7 percent of total Department of Defense, In the U.S. selective when compared to the broadly nonagricultural exports, they accounted balance of payments, shipments by the based advances of prior years. Con- for about 60 percent of the overall rise Department of Defense are classified as struction equipment and electrical ap- in nonagricultural exports in January- military transactions rather than mer- paratus were among the few types of September 1963 from 1962. chandise exports. Nearly four-fifths of machinery exports to show significant Total exports of agricultural prod- the overall drop in such commercial ex- increases: shipments of industrial ma- ucts were substantially higher than in ports reflected a reduction in shipments chinery, which had risen by nearly 1962, even though Government-financed to Western Europe. one-half over the course of the previous shipments of agricultural products in The decline in exports of civilian air- 3 years, were no higher in January- the first three quarters of 1963 were al- most unchanged from 1962. The share Table 1.—Changes in Government Financed l and Commercially Financed Exports of of Government-financed shipments in Agricultural arid Nonagricultural Products. 1960-63 total agricultural exports thus declined by a few percentage points, but still accounted for 28 percent of the total. Total exports Agricultural exports X on a gr icultur al exports Most of the 1963 rise in Government- Govern- ! ' \ Govern- j i Govern- Total i nient ! Other | Total nient j Oilier Tota] nient Other financed exports took place in the sec- financed { . , financed 1 financed ond quarter of the year, when these shipments spurted to a seasonally ad- A nnual eh angcs : 1960-61 +0.45 i +0.31 ! +0. 14 i +0.19 ': +0.09 +0. 10 + 0.26 ! +0.22 +0. 04 1961-62 . _„ _. +.57 +.11 +.46 ;, +.01 —.05 +.00 + .56 | +.16 +.40 justed annual rate of $3.3 billion. In 1962-63 ?. +.88 +.34 +.54 +.34 +.01 , +.33 . + . 54 +. 33 + .21 the third quarter, however, they fell Change from 1962 to III [ ! : - ' quarter 1963 at seasonally ! back to a $2.4 billion annual rate—only adjusted annual rate + 1.68 +.08 +1.60 1 +.40 i —.19 '. +.59 + 1.28 +.27 +1.01 slightly above that of 1962—while com- i 1. Financed by Government capital and grants. mercial exports of both agricultural and 2. 1963 based on January-September at seasonally adjusted annual rate. nonagricultural products advanced. Source: U.S. Department of Commerce, Office of Business Economics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis January 1964

24 SURVEY OF CURRENT BUSINESS January 1064 September 1963 than a year earlier u.S. EXPORTS OF FINISHED MANUFACTURES^ (see chart). BN1 MAJOR PRODUCT COMPONENTS U.S. MERCHANDISE EXPORTS' MACHINERY - Export Gains in 1963 In contrast to the situation in 1961 BY MAJOR PRODUCT COMPONENTS Limited Mainly to Construction and 1962, when exports of industrial Basic Commodities Lead 1963 Export Rise and Electrical Equipment machinery to Japan had advanced Bill ion $ substantially, such exports in January- INDUSTRIAL MATERIALS AND 4 September 1963 were down by about AGRICULTURAL PRODUCTS 10 percent from a year earlier. (See Upswing in Exports of table 2.) This decline was due in Industrial Materials Reverses 3 — Industrial Machiner/ — 2 - Year Decline; Agricultural part to investment cutbacks in certain Commodities Also in Rise segments of the Japanese economy, Billion $ such as the steel industry. Japan's 2 Construction Equipment aggregate imports of industrial ma- (incl. tractors) chinery from countries other than the \ United States did not decline, however, 7 — 1 Fuels & Other but remained as high as in January- Industrial Materials . (Nonagricultural) Electrical Equipment Another adverse aspect of our export 6 - 0 i 1 1 i i trade in machinery in 1963 was the 1958 59 60 61 62 63* severe contraction in shipments to OT HER FINISHED PRODUCTS ^ Argentina and Brazil, both of which 5 - Progress in Exports of Autos and experienced acute financial crises during Consumer Goods Offset by Declines iri Commercial Deliveries of Mi'itary- the year. These same two countries T>/pe Equipments/and Civilian Aircraft had also ace o an ted for most of the de- cline in our machinery exports to Latin 2 Agricultural AUTOS AND PARTS America in 1962. (See table 2.) On the other hand, the 11 percent 1 growth in machinery sales to Western Europe in January-September 1963 as compared to a year earlier was rela- 0 111!! tively about as large as the gain in 1962 —notwithstandin g the slowdown 1958 59 60 61 62 63* 2 NONFOOD CONSUMER GOODS in manufacturing investment activity FINISHED MANUFACTURES J/ (Excluding Industrial Materials) (excl. Autos) in most European countries. The Flattening in Exports in 1963 increased European buying during 1963, Follows 4 - Year Rise 1 however, was concentrated mainly in construction equipment and electrical 10 apparatus rather than in industrial 0 ! 1 1 1 1 machinery, as was the case in 1962. The uptrends in machinery exports 9 ~ 2 MILITARY- TYPE EQUIPMENT 2J to India and to Australia, which had (excl. Defense Dept. Exports) begun in 1962, also extended into 1963. 1 Consumer goods made minor con- tribution

0 1 1 1 1 1 Although exports of manufactured consumer goods (excluding autos) 1 CIVILIAN AIRCRAFT moved upward from their 1962 plateau, the year-to-year gain in such sales in the first 9 months of 1963 was 1958 59 60 61 63" 0 1 1 i 1 i only $27 million (3 percent). Much 1958 59 60 61 62 63* * Jan. —Oct. at annual rate except for Jan. —Oct. at annual rate except for autos and of the progress made in sales to Western * agricultural commodities which incluae aircraft which include estimates for Nov. and Dec. Europe and Japan was offset by declines estimates for Nov. and Dec. Excludes industrial materials J/ in exports to Latin America, and to Jy Excludes Defense Dept. exports of military 2i Excludes Defense Dept. exports of military equipment sold for cash and shipped on a equipment sold for cash and shipped on a Canada as well, which did not com- grant —aid basi s grant-aid basis; includes some civi iian - type pletely abandon its temporary import goods such as airport equipment & jet engines U.S. Department of Commerce, Office of Business Economics 64-1-24 for passenger transport planes restrictions until the end of March. U.S Department of Commerce. Office of Business Economics 64-1-23 Even with the recent increases, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis January 1964

January 11)04 SUEVEY OF CUBKEXT BUSINESS 25 sales of consumer goods comprised less trade balance in autos and parts—by Western Europe and Japan. Over than 5 percent of total U.S. exports to tying auto imports into Canada to auto three-fourths of the more than $300 Western Europe and hardly 2 percent exports from Canada—the large net million year-to-year rise in January- of our exports to Japan. surplus in U.S. auto trade with Canada September 1963 was destined to these (about $450-$470 million in 1963) may areas. Assembly parts boost auto exports be gradually reduced. Among individual types of commod- The bulk of the gain in automotive Gain in industrial materials to Eu- ities, fuel (principally coal shipments to exports during the past 2 years (see rope and Japan the EEC countries) comprised the chart) has been in shipments of parts The reversal of a 2-year downtrend largest single component of the advance for assembly, particularly to Canada. in exports of nonagricuitural industrial in such exports during 1963. To the In view of Canada's recently announced materials during 1963 reflected mainly extent that the increased European 3-year program to reduce its adverse a resurgence of demand on the part of demand resulted from such unusual

Table 2.—Changes in U.S. Merchandise Exports,1 by Major Categories and Products, to Selected Areas and Countries 1960-61; 1961-62; and January-September 1962 to January-September 1963

Nonagricuitural products Total, all Agricultural ca tegories products Inc ustrial supplies and materials Mfrd. con- Total Machinery sumer goods Aulos and Civilian Other and (nonfood) parts aircraft unclassified Total Fuel Other excl. autos

Mil- Mil- Mil- Mil- Mil- Mil- Mil- Mil- M il- Mil- Mil- lions Per- lions Per- of cent of cent of cent of cent of cent of cent of cent of cent cent of cent of cent dol- dol- dol- (lo1- dol- dol- dol- dol- dol- dol- lar lars lars | Itirs lars \ lars lars lars lars lars lars

Total, all areas 1960 to 1961 -f251 -{-1. 3 +192 +4- 0 +59 +0. 4 -150 -2.4 -104 -2.0 +389 +9. 4 +32 +3. 0 -84 —6. 9 —195 -35. 4 +7 2 +391 +0.1 -13 -3.7 1961 to 196'? +331 +7 +0.1 +324 +2. 3 -193 -3.2 +34 -4-4 +8. 6 +i +84 +7. 4 IS +5. 4 Jan. -Sept.: 1962 to 1963... +570 +3. 9 +144 +3. 9 +4-26 +3. 9 +312 +7.1 +103 m +209 +5. 6 +121 +3.3 +3. 2 +42 +4>* -80 -28. 6 +4 +0. 5 United Kingdom 1960 to 1961 -281 -19.9 -84 -16.3 — 197 —22.0 -161 -W. 8 0 0 -161 -31.3 +50 +27. 5 +4 +9.5 0 o —85 -96. 6 -13.2 1961 to 1962 55 -4. 9 -24 -5. 6 -31 -4. 4 -40 -10. 6 — 37 — W. 5 -3.0 0 0 + + 16. 7Q +12 +400. o + +9.1 Jan.-Sept.: 1962 to 1963--- +1 +0.1 -50 -17.2 +51 +10. 3 +19 +7. 5 +1 j ^ g +18 +7. G +22 +13.4 +8 +22. 9 l 0 0 l +8.3 E.E.C. Countries 1960 to 1961 +98 +2.8 +58 +4( +1.7 -78 -5.7 _19 -66 -5.6 +226 +44- 4 +15 +14. 7 4-4 +7.0 -61.9 +11 + 13.3 1961 to 1962 +2 & -8 11? +85 +3. 6 -54 —4. 1 +32 4-17 6 -86 -7.7 +90 + 12.2 +6 +5.1 +6 +9. 8 +23 +27. 1 +14 + 14-9 Jan.-Sept.: 1962 to 1963 +120 +4-4 -65 -7.8 +185 +9. 9 +135 +14.3 +80 +51.3 + 55 +7.0 +6( +9. 6 +17 +18. 3 +13 +31.0 — 67 -58.2 + 17 +21. 0 Belgium 1960 to 1961 —18 ~'i I —16 —2 —0 7 -4 -2.6 +1 +5. 0 —5 -3.8 +22 +33. 8 0 0 0 0 -20 -95. 2 0 0 1961 to 1962 +27 +6. 4 +12 +23. 2 +15 +5.0 -5 -3.4 +3 •-4- 1 A. 3 -8 -6. 3 +4 +4. 6 +4 +23. 5 +1 +3.7 +5 +500. 0 +6 +28.6 Jan.-Sept.: 1962 to 1963. . +34 + 10.2 -11 +8.2 +45 + 19.2 +26 +23. 9 +15 +88. 2 +11 + 12. 0 +10 +14.9 +4 +25.0 +1 +5.9 -16. 7 +5 +26. 3 France 1960 to 1961 _. ------15 -2.6 -16 -11. 8 +1 +0.2 +« +4-5 -1 -5. 6 +10 +5.5 +61 +51. 3 +10 +55. 6 +1 +12. 5 -81 -85. 5 +1 +7.7 1961 to 1962 +20 +3. 5 +10. 0 +46 + 10.2 -11 -5. 3 -1 -5.9 -10 -5.2 +31 +17.2 +2 +7.1 0 0 +21 + 150.0 +3 +21.4 Jan.-Sept.: 1962 to 1963 +42 +9. 5 +1 -11.1 +37 +9.7 +19 + 12. 5 + 15 +125. 0 +4 +2.9 +18 +11.2 +9 +40. 9 0 0 — 7 -25. 9 -13. 3 W. Germany 1960 to 1961 +6 4-0.6 +16 +4-5 -10 — 1.4 -70 -15. 1 -4 -7.5 -6f -16.0 +53 +33. 8 +6 +20. 0 +4 + 66. 7 —6 -19.4 +3 +13. 0 1961 to 1962 4-0.2 +20 +5. 4 -18 —40 -10.1 +12 +24- 5 K9 — 15.0 +10 +4-8 0 +9 +90.0 0 0 +3 +11.5 Jan.-Sopt.: 1962 to 1963.. 11 -1.0 —49 -17.0 +41 +7'. 9 +28 + 10.4 +8 + 17. 8 +20 +9.0 +20 +12. 2 0 °0 +9 +75. 0 -14 -58.3 2 -8.7 Italy 1960 to 1961 +144 +22.0 +76 +46. 9 +68 + 13. 8 -1 —0. 3 —3. 2 +1 +0.4 +62 +62. 6 +1 +4- 5 + +33. 3 +1 +5. 6 +4 +28.6 1961 to 1962 -29 —3.6 -62 -26. 1 +33 +5.9 +3 +0.9 +12 + 20.0 Q -3.3 +30 + 18.6 -8.7 S 0 +2 +10.5 0 0 Jan .-Sept . : 1962 to 1963 .... +90 +15. 9 +21 +17.2 +69 +15.6 +43 +17.1 +19 +35. 2 +24 + 12.1 +32 +22, 9 +6 +37.5 + 1 +50. 0 -15 -71. 4 +2 +16.7 Netherlands 1960 to 1961 18 2 5 0 6 16 ~4 1 13 5 7 —8 -4-3 +28 +40. 0 0 0 — 16.7 -30 -52. 6 +1 +7.7 19(51 to 1962 4 55 +7.9 +48 + 15.1 +7 +1.8 -1 -0.5 +5 +13. 9 — 6 -3.3 +15 +15.3 +2 + 14-3 -30. 0 —6 22 2 () 0 Jan .-Sept . : 1962 to 1963 - - - -37 —6.6 -31 -11.9 —6 —2.0 +20 +12. 5 +21 +75. 0 -1 -0.8 -19 -21. 1 -8.3 +2 +40.0 -20 -100. 0 +12 +92. 3 Other W. Europe 1960 to 1961 +157 +10.9 +157 +34-1 0 0 -1.5 —6 -9.7 0 0 +22 +7.1 +12 + 15.0 -9. 6 -17 -25.4 -4 -6.9 1961 to 19f/<* +63 +3.9 -18 -2.9 +81 +8.2 +10 +2. 5 +3 +5.4 +7 +2.1 +72 +21. 8 +4 +4-3 -3.0 -4 -8.0 +1 +1.9 Jan.-Sept.- 1962 to 1963 +56 +4-4 g -1.9 +65 +8.2 +18 +5.9 +12 +26. 7 +B +2.3 +37 + 12.5 +19 +26. 4 +4-3 -43.6 +6 +15.8 Japan +224 + 10.6 1960 to 1961 +399 +29. 8 +66 +13.5 +333 +39. 1 +38. 4 +1 +210 +46.5 +89 +47.1 +7 +63. 6 +3 +60. 0 :-7.7 +12 +32. 4 1961 to 1962 -326 -18.7 -73 — 13.2 -253 -21. 4 -292 —36. 1 9 -1.4 -290 -43. 8 +16. 2 +2 +11.1 +1 +12. 5 -i -4-2 -8 -16.3 Jan.-Sept.: 1962 to 1963 +150 +14.2 +82 +24. 1 +68 +9.5 +61 + 15.0 —6 -5.3 +67 +22. 8 i£ -10.3 +12 +92.3 +28. 6 +7 +31.8 +11 +40.7 Canada - 1960 to 1961_ -66 -1.8 +59 +13. 7 -125 -3. 8 —59 -4-8 -24 -12.6 -35 -3.4 -61 -5. 7 -6 -1.8 -30 +28 +68.3 +3 +1.3 1961 to 1962 +187 +5.1 +21 +4-3 +166 +5.3 +25 +2.2 -4 -2. 4 +29 +2.9 +112 +11.1 -17 -5.2 +90 +25. 1 -59 -85. 5 +15 +6.6 Jan.-Sept.: 1962 to 1963 +127 +4. 4 +45 +11.9 +82 +3.3 +21 +2.4 +13 +11. 2 +8 +1.0 +49 +5.8 -33 -13.9 +24 +7.5 +25 +m. 8 A -2.2 Latin America 1960 to 1961 _- -63 -1.8 +3 +0.7 -66 -88 -8.5 -25 -21.0 -63 -6. 9 +34 +3.4 +4 + 1.7 -26 -6. 0 0 0 +10 +3.5 1961 to 1962 -193 -5.7 -56 -12.9 -137 -4. 6 -24 -2.5 +4 +4-3 -28 -3.3 -63 -6.1 -16 -6.5 -35 -8.7 -4 -8.0 +5 + 1.7 Jan -Sept.- 1962 to 1963 -101 -4. 2 +54 +19.4 -155 -7.2 4 -0.6 2 -97 -13. 0 -13 -7.6 -9.7 +8 +29. 6 -22 -9.7 All Other Countries I960 to 1961 +7 +0.2 -67 -4-8 +74 +2.8 +18 +1.8 +7 +6.0 +11 +1.3 +29 +3.3 -4 -1.5 9S -10.7 +19 +33. 9 +40 +20. 0 1961 to 1962 +578 +14.2 +165 +12.4 +413 +15.2 +182 +18.1 +4 +3.3 +178 +20.1 +142 +15.7 +22 +8.4 +23 +9.8 +20 +26.7 +24 + 10.0 Jan.-Sept.: 1962 to 1963... +217 +6.3 +87 +7.7 +130 +5.6 +62 +7.1 +5 +5.4 +57 +7.2 +75 +9.6 +17 +7.9 +28 +15. 1 -46 -64.8 -6 -2.9

1. Excludes "special category" (mainly military-type) goods. 2. Agricultural exports to Canada include some transshipments to other countries, mainly in Western Europe. Source: OBE from basic data of Bureau of the Census. 717-425—04 4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis January 1964

26 SURVEY OF CURRENT BUSINESS January 1964 Table 3.—Percent Changes in Wage Rates 1 commercial sales for dollars) from the and cotton, advances in exports of soy- and Productivity 2 in Manufacturing In- dustries, United States and Selected Eu- $5 billion exported in each of the 2 beans, dairy products, fodders and ropean Countries, 1960-63 previous years. feeds, tobacco and some other com- [Percent] In. January-September 1963 agricul- modities are expected by the Depart-

January-June, yearly changes tural exports to the United Kingdom, ment of Agriculture to raise total agri- Country and to the EEC countries whose addi- cultural exports from $5.1 billion in fis- 1960-61 1961-62 1962-63 1960-63 tional taxes on imports of grains and cal 1962-63 to about $5.8 billion in the

United States poultry have been in effect since the fiscal year 1963-64. The $5.8 billion es- Wages 4-2.3 +'3.2 +3.1 +8.9 end of , wore down substan- timate does not include sales to the Troductivitv 4-1.8 + 4.4 4-3.0 +9. 5 United Kingdom tially from a year ago. (See table 2.) Soviet Union, which, at the time of Wages 4-7 2 -M 2 +3.2 + 15.3 These declines were more than offset writing, amounted to $85 million. Productivity -HI. 4 0 +4.0 +5. 5 W. Germany by increased shipments of agricultural Since it appears that agricultural \Vages___J •-•- 10. 4 4-12.3 + 7. 7 +33.5 commodities to Japan and to a number Productivity H-3.1 +3. 4 +3. 3 + 10.0 exports in July- had France of other countries such as India and not quite reached the $5.8 billion rate Wages... 4-6. 6 +9.5 +9.1 +27. 3 Pakistan. Productivity -H. 2 3 +3. 0 3+13.0 anticipated for the fiscal year as a Italy In the fourth quarter of the year whole, some further expansion may be Wages, + 12.S + 18.4 +41,8 wheat exports to Western Europe, Productivity 4- '2. '2 + 14. 1 +6. 0 +23. 6 expected in the first half of 1964. where crops had suffered heavy losses Indications are, however, that any 1. Hourly earnings. due to the severe winter of 1962-63, additional improvement—aside from 2. Output per man-hour. 3. Estimate based on employment and industrial produc- turned up sharply. Our cotton ship- sales to the Soviet Union—would be in tion after adjusting lor adverse effects of severe winter and coal strike in early 1963. ments to Western Europe and to other Government-financed shipments rather foreign destinations also moved higher than in commercial sales for dollars. in the fall quarter. Cotton exports factors as the severe winter, the con- during the year ending Recent competitive developments sequent rundown of the Community's are expected to total some 5 million During the past 3 years the rise in coal stocks, and the production loss of bales, up from 3.4 million bales in manufacturing wages in the United some 5 million tons due to the French 1962-63, chiefly as a result of the new States appears to have been about in coal strike in March, the rise in our program which permits the sale of line with advances in productivity, coal exports may be only temporary. cotton from CCC stocks at competitive while increases in wages abroad have If fuel is excluded, the rise during the world prices, and of the temporary greatly exceeded the apparent incre- past year in nonagricuitural exports to reduction in cotton supplies in other ments to productivity. (See table 3.) Japan alone was almost as large as the exporting c oun t ri es. As a result of this disparity, prices in rise in such exports to all Western Together with the increases in wheat the United States have been relatively European countries combined. (See table 2.) Following a period of relative Table 4.—Imports by End-Use Categories, 1958-1963 stability lasting well over a year, 1963 Japanese industrial production swung End-use category 195S 1959 1960 1961 1962 Tan. -Sept. at annual rate sharply upward early in 1963 and seas, adjusted continued to climb, especially in the j i Mil- Per- Mil- Per- Mil- Per- Mil- Per- Mil- Per- Mil- Per- summer quarter. lions of cent of lions of cent of lions of cent of lions of cent of lions of ! cent of lions of cent of Omitting fuels, much of the recent dollars total dollars total dollars total dollars total dollars j total dollars total rise in exports of industrial materials General imports, tolaU. 12, 807 100.0 15,207 100.0 14, 654 100.0 14, 437 100.0 16, 144 100,0 16, 807 100.0 Food and beverages, total- 3, 354 26.1 3, 364 22.1 3,209 21.9 3,259 22.6 3, 519 21.8 3, 500 20.8 has been centered in iron and steel Coffee . _ _ 1,173 9.1 1,094 7.2 1,002 6.8 961 6.7 987 6.1 911 5.4 Meat, sugar, and scrap, logs and lumber, paper-base other foodstuffs 2, 181 17.0 2, 270 14-9 2,207 15.1 2,298 15. 9 2,532 15.7 2. 589 15.4 stocks and crude chemicals. By com- Industrial supplies and materials, total 6, 585 51.2 8, 021 52.8 7, 593 51.8 7, 397 51.2 8, 205 50.8 8, 44T 50. 2 parison, increases in exports of steel Steel mill products 231 1.8 573 3.8 508 3.5 421 2.9 537 3 3 665 3 9 1,610 12. 5 1, 536 10.1 1, 548 10.5 1,679 11.6 1,814 ll'.g 1.885 i'i.2 mill products, plastics^ textile fabrics Lumber and other building supplies 435 3-4 603 4.0 541 3.7 538 3 7 617 j 3.8 651 3.9 and most other industrial materials Other.../.....'. 4, 309 S3. 5 5, 309 34. 9 4, 996 34-1 4,759 33.0 5, 237 32.5 5. 240 01 ^ incorporating a fairly high manu- Materials used in agri- facturing component, were relatively culture 366 2.8 366 2.4 353 2.4 390 2.7 418 2.6 590 3.0 small or negligible. Among the latter, Capital equipment, total. 481 3.7 618 4.1 602 4.1 720 5.0 787 4.9 875 5.2 Machinery 400 3.1 536 3.5 518 fi.n 551 3.8 651 4.0 767 4.6 exports of synthetic rubber were down Other capital equip- i considerably from 1962. ment incl. aircraft _ 75 .6 82 .6 84 .6 169 1.2 136 .9 108 .6 Nonfood consumer goods . 1,710 13.3 2,424 15.9 2, 459 16.8 2,200 15.2 2,707 16.8 2,885 17.2 Passenger cars 503 3.9 766 o.O 544 3.7 318 '2. 9 433 2 7 475 2.8 Upswing in agricultural exports Other 1,207 9.4 1,658 10.9 1,915 13.1 1,882 13.0 2,274 14.1 2,410 14.4 Other and unclassified -'._ 371 2.9 414 2.7 438 3.0 471 3.3 508 3.1 606 3.6 The $5.5 billion total estimated for 1 Bureau of Census recorded general imports, excluding uranium. agricultural exports in 1963 reflected a 2. Mostly manufactured items: noncommercial imports and shipments valued under $100; includes military aircraft. pickup of some $500 million (mainly in Source: Office of Business Economics, from basic data of Bureau of Census.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis January 1964

January 1904 SURVEY OF CURRENT BUSINESS 27 stable while internal prices abroad have competitive ability, and during the downturns of 1958 and 1961. But the risen,, even though some of the cost past several years foreign countries advance was considerably less than increases were absorbed by a reduction have gained an increasing advantage the sharp gain from 1961 to 1962. in profit margins. These differential with respect to some of these factors. (See table 4.) price movements should have strength- For example, technological advances The diminished rate of advance in ened our competitive position as an in foreign countries are rapidly catch- 1963 imports was probably associated exporter of manufactured goods. The ing up with our own, in part as a result with the recent implementation of fatft that our recent export performance of our direct investment abroad and textile agreements with a number of in manufactured goods does not show of U.S. licensing agreements with foreign exporter nations to limit the more evidence of this improved price foreign producers. Delivery dates flow of their cotton textile shipments to relationship may be due to a number of abroad have become shorter with this country. In addition, Japan's TV factors. First, foreign prices are more the development of excess capacity manufacturers imposed voluntary re- flexible than our own, and are geared in major foreign industries such as straints on further price cutting and on to meet outside competition—not only steel and capital equipment. the volume of their exports to the export competition, but also competi- Third, while foreign markets for United States. tion from imports. This may explain consumer goods are both large and While imports of foreign passenger why there has been little or no increase growing rapidly, and consumer prices cars advanced in 1963 for the second in export prices of major competitor abroad have gone up much more than successive year, they were still sub- CM* unfcries even though domestic prices those in the United States, consumer stantially below the peak totals of 1959 in these countries have increased goods still comprise only a negligible and 1960. The share of new foreign- substantially. segment of our export trade. So long car sales in the expanding U.S. car Second, certain factors may not be as most U.S. manufacturers of consumer market of 1963—about 5% percent— property reflected in the price indexes— goods do not attempt to enter export was little more than half of what it had stieh as quality, technological supe- markets, price movements to our ad- been 4 years earlier. riority, salesmanship, delivery dates, vantage, no matter how favorable, Capital equipment imports continue servicing and credit terms. These are will have little or no impact on our uptrend ulso major determinants of a nation's exports. Although imports of capital equip- ment—primarily machiiiery—still com- Recent Trends In U.S. Imports prise only 5 percent of total U.S. purchases from abroad, this category of Manufactured Goods lead 1963 Import Rise goods has experienced an almost un- interrupted series of moderate annual THE 1963 import rise in finished Food and beverage imports in 1963, increases throughout the postwar period. manufactures—principally nonfood con- after recovering from a first-quarter dip, Last year a two-thirds cutback from sumer goods and capital equipment— were little changed from the record 1962 1962 in deliveries of foreign civilian accounted for about 55 percent of the total. A decline in 1963 in the quan- aircraft was more than offset by a overall year-to-year expansion in im- tity and unit price of coffee—a com- concurrent rise of over $100 million in ports, although finished manufactures 2 modity which in past periods has imports of machinery and other capital have comprised just 23 to 26 percent accounted for from one-fourth to more equipment. of total U.S. imports during the past than 40 percent of all foodstuffs im- Area trends in imports 3 five years, ports—was substantially offset by the The smaller year-to-year advance in From a first quarter trough, imports extension of 1962's gains in imports of 1963 imports—about $1 billion less of industrial materials moved higher meat products and sugar. The rise in than 1962's steep upswing from the in subsequent quarters of 1963 to the value of 1963 sugar imports re- recession-affected year 1961 —reduced accumulate an annual total surpassing flected, in part, the impact of higher unit prices per pound in the July- Gains in Two Import Upturns the preceding year's record high. But September quarter, as shipments under 1961-62 1962-631 1961-62 1962-63 ' the 1963 gains were selective, being contracts placed earlier in the year— largely confined to such industrial $ Mil- $Af/7- Per- Per- when world quotations were at a peak— lions lion-x cent cent supplies as steel, petroleum, and build- reached U.S. ports. ("Hob-il 2 'Ul 'irc'H 1 707 663 11 8 j \ ing materials. Western Europe 487 100 12.0 2 2 Canada 420 •>26 13 6 6 4 Advance in nonfood consumer goods Latin America 173 14 5 4 0 4 The past year also witnessed a pickup eases Japan 303 130 28.7 10.7 in imports of materials used in agricul- All other 3'?4 193 9 6 5 8 U.S. imports of nonfood consumer ture, such as burlap, jute, and twine 1 1963 based on January-September annual rate, seasonally goods, excluding passenger cars, scored adjusted2 . manufactures. another new high in 1963, extending the Total general imports, excluding uranium. long-term rise which had been only 3. Data in this section exclude uranium imports; 1963 is Excluding finished supplies for industrial -and agricultural based on January-September at an annual rate, seasonally briefly interrupted during the cyclical adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis January 1964

28 SURVEY OF CURRENT BUSINESS January 1964 the size of the dollar gains of this Latin America's 1962 gain was nearly the dollar advances last year were country's major suppliers abroad. The eliminated. Canada and Japan were smaller. The detail on area changes increase in imports from Western both relatively large beneficiaries of in imports from 1961 to 1963 is shown Europe was reduced the most, while the import rise in 1963, as in 1962, but in the following table:

Lumber Stocks (Mill), End of Month, 1951-62: Revised Data for Page S—31 * [Millions of board feet]

Softwoods Softwoods Total, Hard- Total, Hard- Year and month all woods Year and month all woods types Total 2 Southern Western types Total 2 Southern Western pine pine pine pine

1951' Tanuarv 5, 966 1. 976 3. 990 1.265 1,249 1957: Januarv 7 449 2 048 5 401 1 576 1 836 February - - 5. 832 1.937 3,895 1.228 1, 162 February 1 590 5 471 2 119 1 5789 1 8°99 March 5, 617 1.931 3 686 1,205 1.089 March 7 665 2 182 5 483 1 54 1 81 April 5, 61 1 1,915 3. 696 1, 228 1.088 April 7 591 2 194 5 397 1 5" 1 784 May _ _ - 5, 830 1 . 967 3, 863 1 . 290 1.152 May __. 7. 507 2,185 5,322 ! 1,484 1. 775 June 6,217 2, 057 4. 160 1.343 1.286 Juno ._ 7 438 2 193 5, 945 1 458 1 803 July 6, 515 2.142 4.373 1 , 383 1 . 403 July 7 379 9 973 5 106 1 496 1 789 9 \UgUSt 6, 755 2. 215 4, 510 1 , 387 1.518 August 7 370 334 5 036 1 380 1 787 September - _ 6, 964 2.288 4. 676 1 . 349 1 . 609 , 499 2 382 5, 047 1 353 1 895 October 6,990 2. 323 4. 667 1.276 1 , 660 October 9 393 5 003 1 331 1 £97 November 7,023 2, 316 4. 707 1,284 1.689 November 7 973 2 901 5 07° 1 336 1 858 December 7, 141 2, 332 4, 809 1,326 1.G86 December 7 049 1 961 5 088 1 399 1 89Q Monthly average 6, 372 2,117 4, 255 1,297 1,383 TV! on th 1 v a verace 2 900 o "o 1 449 1 819 1052* Tanuarv 7.070 2.314 4, 756 1.367 1,576 1958: January - 7 086 1 908 5 178 1 449 1 773 February - - 0. 876 2, 295 4, 581 1.373 1 . 459 February ... 7 13'? 1, 830 5, 302 1 . 400 1 779 6, 761 2.332 4,429 1,348 1 , 356 Ms? rob 7 093 1 783 5 310 1 458 1 76 r> April 6. 653 2, 347 4. 306 1.340 1. 296 April 6 099 1 764 5 158 l' 439 1 694 Mav 6, 668 2. 362 4. 306 1 . 363 1 . 297 Mav 6 7«9 l' 754 5 035 1 399 Tune 6. 802 2 401 4.401 1,343 1.353 June . 6 735 1 812 4 993 1 373 1 Of>7 Tuly 6. 934 2. 442 4. 492 1.309 1.426 July 6 690 1 859 4 767 1 331 1 67(i 6. 929 2. 481 4. 4-8 1 , 209 1 . 482 Ausnist (*>' 574 1 888 4 686 ' 1 970 1 70-") September 7 025 2,517 4. 508 i , 264 1. 529 510 1 937 4' 573 1 200 1 75* October 6, 837 2. 307 4. 530 1.249 ! . 586 October 6 590 1 935 4 *85 l' 173 1 759 November 6,708 2 172 4. 536 1.234 1. 595 November 6 594 1 99 8 4 666 1 173 1 799 December 6, 661 2, 075 4. 586 1. 2(52 1. 565 December. _ _ . _ _ 6 643 1 936 4, 707 1 , 994 1, 789 Monthly average 6, 827 2,337 4. 490 1.305 1 . 460 Monthly average 6 769 1 861 4 c'08 • 1 399 1 733 1953* Tanuary 6 620 2, 048 4 57? 1 292 1.482 1959: January 6 6" 1 916 4 '<06 ' 1 953 1 7^1 February 6. 565 2, 005 4. 560 1 . 326 1.415 February h '17? 1 ' 866 4 706 1 9-~7 1 701 March 6, 445 1.883 4. 562 1. 343 1 . 369 March... (> 405 1 850 4' 555 i 1 916 1 (V'V1 April 6, 338 1.757 4, 581 1 . 393 1. 369 April 6* ? 15 1*830 4,3K5 : 1 165 i 558 6 236 1.617 4.619 1.397 1 . 388 May 6 I'M 1 811 4 v'jo ! 1 131 1 510 6, 246 1, 564 4. 682 1,418 ] , 448 .Tune 6 090 l' 869 4 991 •' 1 085 1 549 Tuly 6, 369 1,600 4. 769 1. 425 1.524 July .. 6 031 1 997 4 104 1 043 1 54S August 6. 567 1. 705 4. 862 1 . 436 1. 590 August. 6 0" I 937 4 085 1 . 000 1 609 September 6,810 1 . 863 4. 947 1.428 1 . 667 September 6 195 1 981 4 914 ' 938 1 r;s9 October 7 095 2. 004 5, 091 1 . 499 1. 741 October 6 334 1 964 4 270 1 017 1 749 November 7, 304 2, 105 5. 199 1 . 538 1 . 768 November 6 573 1 ' 972 4 601 ^ 073 1 890 7 477 2 900 5. 277 1,626 1 . 754 December 6 6C»7 1 973 4 794 i ~i y, 1 KIG Monthly average 6, 673 1 . 863 4, 810 1.427 1.543 M on th 1 v average 6 393 1 911 4, 419 1 116 1 f.58 7 550 2 175 5 375 1 710 1 699 I960' Januarv 6 79r> 1 944 4 7*1 ' 1 l>09 1 1 0 1 February 7, 552 2. 1 16 5, 406 1, 763 1.645 February _ __. . . 6 830 1 881 4, 949 i 1 954 l' 784 March 7. 456 2 120 5. 336 1.784 1.582 March 6 965 1 804 5 161 i 1 319 1 834 \pril 7 307 2 093 5, 21 4 1. 782 1.554 April 6 955 l' 789 f) 173 : i 395 1 S90 May 7, 317 2. 067 5. 250 1 . 756 1 . 581 May 6 945 1 186 5 159 1 358 1 ' !>::-> 9 7.027 2. 043 4, 984 1 , 660 1.564 June ... 7 018 1 898 5, 1 90 ' 1 894 I line 1. 397 - 9 Tulv 6 745 2, 019 4, 726 1, 524 1 519 July 7 086 1 894 5 19 1 41Q 1 Q ' 5 6 612 1 993 4.619 1 . 440 1 541 August 7 017 1 930 5 987 ; 1 419 1

1. Revisions by months for 1948-50 are available upon request. Revisions for 1962 (Jan.- 9. Includes types not shown separately. Bec., respectively) for Douglas fir are as follows (mil. bd. ft.): 1.064; 1.123; 1,105; 1,102; 1,057; 973; 925; 891; 888; 899; 928; 938. Source: National Lumber Manufacturers Association. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis