US Economic History: Great Depression

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US Economic History: Great Depression US Economic History: Great Depression Yardeni Research, Inc. November 4, 2016 Dr. Edward Yardeni 516-972-7683 [email protected] Mali Quintana 480-664-1333 [email protected] Please visit our sites at www.yardeni.com blog.yardeni.com thinking outside the box Table Of Contents TableTable OfOf ContentsContents Industrial Production: 1929-1941 1 CPI & PPI: 1920-1947 2 Producer Price Index: 1929-1941 3 Dow Jones: 1929-1941 4 Interest Rates: 1920-1941 5 Income Tax Returns: 1920-1942 6 Bank Deposits & Assets: 1920-1942 7 CPI & PPI: 1920-1947 8 Miscellaneous 9-10 November 4, 2016 / US Economic History: Great Depression Yardeni Research, Inc. www.yardeni.com Industrial Production: 1929-1941 Figure 1. 13 13 TB M US INDUSTRIAL PRODUCTION: 1929-1941 (2007=100, monthly) 11 11 9 9 7 7 5 5 yardeni.com 3 3 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 T = Smoot-Hawley Tariff enacted June 17, 1930. B = Emergency Banking Act passed March 9, 1933. M = Mark-to-market suspended June 1938. Source: Board of Governors of the Federal Reserve. Figure 2. 80 80 TB M 60 INDUSTRIAL PRODUCTION: 1929-1941 60 (yearly percent change) 40 40 20 20 0 0 -20 -20 yardeni.com -40 -40 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 T = Smoot-Hawley Tariff enacted June 17, 1930. B = Emergency Banking Act passed March 9, 1933. M = Mark-to-market suspended June 1938. Source: Board of Governors of the Federal Reserve. Page 1 / November 4, 2016 / US Economic History: Great Depression Yardeni Research, Inc. www.yardeni.com CPI & PPI: 1920-1947 Figure 3. 75 75 CONSUMER PRICE INDEX*: 1920-1947 65 65 55 55 45 45 yardeni.com 35 35 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 Source: US Department of Commerce, Bureau of the Census. Figure 4. 17 50 TB M Industrial Commodities 16 US PRODUCER PRICES: 1929-1941 (1982=100, monthly) Grains 40 15 14 30 13 20 12 yardeni.com 11 10 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 T = Smoot-Hawley Tariff enacted June 17, 1930. B = Emergency Banking Act passed March 9, 1933. M = Mark-to-market suspended June 1938. Source: Bureau of Labor Statistics. Page 2 / November 4, 2016 / US Economic History: Great Depression Yardeni Research, Inc. www.yardeni.com Producer Price Index: 1929-1941 Figure 5. 16.5 16.5 TB M 16.0 16.0 15.5 PRODUCER PRICES: INDUSTRIAL COMMODITIES 15.5 1929-1941 (1982=100) 15.0 15.0 14.5 14.5 14.0 14.0 13.5 13.5 13.0 13.0 12.5 12.5 12.0 12.0 11.5 11.5 11.0 11.0 yardeni.com 10.5 10.5 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 T = Smoot-Hawley Tariff enacted June 17, 1930. B = Emergency Banking Act passed March 9, 1933. M = Mark-to-market suspended June 1938. Source: Bureau of Labor Statistics. Figure 6. 48 48 46 TB M 46 PRODUCER PRICES: GRAINS 44 44 (1982=100) 42 42 40 40 38 38 36 36 34 34 32 32 30 30 28 28 26 26 24 24 22 22 20 20 18 18 16 16 14 14 12 12 yardeni.com 10 10 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 T = Smoot-Hawley Tariff enacted June 17, 1930. B = Emergency Banking Act passed March 9, 1933. M = Mark-to-market suspended June 1938. Source: Bureau of Labor Statistics. Page 3 / November 4, 2016 / US Economic History: Great Depression Yardeni Research, Inc. www.yardeni.com Dow Jones: 1929-1941 Figure 7. 400 400 TB M DOW JONES INDUSTRIALS AVERAGE 1929-1941 300 (daily) 300 200 200 100 100 yardeni.com 0 0 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 T = Smoot-Hawley Tariff enacted June 17, 1930. B = Emergency Banking Act passed March 9, 1933. M = Mark-to-market suspended June 1938. Source: Haver Analytics. Figure 8. 13 440 TB M 12 INDUSTRIAL PRODUCTION 400 1929-1941 (2007=100) 11 360 10 DOW JONES INDUSTRIALS 320 1929-1941 9 280 8 240 7 200 6 160 5 120 4 80 yardeni.com 3 40 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 T = Smoot-Hawley Tariff enacted June 17, 1930. B = Emergency Banking Act passed March 9, 1933. M = Mark-to-market suspended June 1938. Source: Board of Governors of the Federal Reserve. Page 4 / November 4, 2016 / US Economic History: Great Depression Yardeni Research, Inc. www.yardeni.com Interest Rates: 1920-1941 Figure 9. 6.5 6.5 THREE-MONTH T-BILL RATE: 1920-1941 6.0 (percent) 6.0 5.5 5.5 5.0 5.0 4.5 4.5 4.0 4.0 3.5 3.5 3.0 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 .5 .5 .0 .0 yardeni.com -.5 -.5 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Source: Board of Governors of the Federal Reserve System. Page 5 / November 4, 2016 / US Economic History: Great Depression Yardeni Research, Inc. www.yardeni.com Income Tax Returns: 1920-1942 Figure 10. 600 600 CORPORATION INCOME TAX RETURNS (millions) 500 500 400 400 300 300 200 200 All Returns 100 Returns with Net Income 100 0 0 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 250 250 CORPORATION INCOME TAX RETURNS (billion dollars) 200 200 150 150 100 100 50 Total Receipts 50 Total Receipts: Returns with Net Income 0 0 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 90 90 RETURNS WITH NET INCOME (billion dollars) 70 70 50 Total Income 50 30 30 yardeni.com 10 10 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 Source: Government Employment and Financies, Series Y 381-392 and Government, Series Y 402-411, Individual Income Tax Returns. Page 6 / November 4, 2016 / US Economic History: Great Depression Yardeni Research, Inc. www.yardeni.com Bank Deposits & Assets: 1920-1942 Figure 11. 60 60 COMMERCIAL BANK DEPOSITS (billion dollars) 50 50 40 40 30 30 20 20 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 35000 35000 NUMBER OF BANKS (millions) 30000 30000 25000 25000 20000 20000 15000 15000 10000 10000 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 100 100 TOTAL COMMERCIAL BANK ASSETS (LIABILITIES) (billion dollars) 90 90 80 80 70 70 60 60 50 50 yardeni.com 40 40 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 Source: Financial Markets & Institutions, Series X 410-419 and Banking, Series Y 580-587. Page 7 / November 4, 2016 / US Economic History: Great Depression Yardeni Research, Inc. www.yardeni.com CPI & PPI: 1920-1947 Figure 12. 20 20 CONSUMER PRICE INDEX*: 1920-1947 (yearly percent change) 15 15 10 10 5 5 0 0 -5 -5 -10 -10 yardeni.com -15 -15 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 Source: US Department of Commerce, Bureau of the Census. Figure 13. 30 30 CONSUMER PRICE & PRODUCER PRICE INDEXES: 1920-1947 (yearly percent change) 25 25 20 20 PPI: Industrial Commodities (1982=100) 15 15 10 CPI 10 (1967=100) 5 5 0 0 -5 -5 -10 -10 -15 -15 -20 -20 yardeni.com -25 -25 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 Source: Bureau of Labor Statistics. Page 8 / November 4, 2016 / US Economic History: Great Depression Yardeni Research, Inc. www.yardeni.com Miscellaneous Figure 14. 3.8 3.8 3.6 TOTAL IMPORTS OF 75 COUNTRIES 3.6 1929-1923 3.4 (billion dollars, monthly) 3.4 3.2 3.2 3.0 3.0 2.8 2.8 2.6 2.6 2.4 2.4 2.2 2.2 T 2.0 2.0 1.8 1.8 1.6 1.6 1.4 1.4 1.2 1.2 1.0 1.0 yardeni.com .8 .8 1929 1930 1931 1932 1933 T = Smoot-Hawley Tariff enacted June 17, 1930. Source: League of Nations, Monthly Bulletin of Statistics, February 1934, p. 51. Figure 15. 500 500 DEPOSITS OF SUSPENDED COMMERCIAL BANKS: 1929-1933 (millions dollars, monthly) 400 400 300 300 200 yardeni.com 200 100 100 0 0 1929 1930 1931 1932 1933 Source: Federal Reserve Bulletin, September 1937, Table 13, p. 909. Page 9 / November 4, 2016 / US Economic History: Great Depression Yardeni Research, Inc. www.yardeni.com Miscellaneous Figure 16. 8 8 DEPOSITS OF SUSPENDED COMMERCIAL BANKS (cumulative since January 1929, billions of dollars) 6 6 4 4 2 2 0 0 yardeni.com -2 -2 1929 1930 1931 1932 1933 Source: Federal Reserve Bulleting, September 1937, p.909, Table 13.
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