October 1953
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OCTOBER 1953 U. S. DEPARTMENT OF COMMERCE OFFICE OF BUSINESS ECONOMICS SURVEY OF CURRENT BUSINESS DEPARTMENT OF COMMERCE FIELD SERVICE Albuquerque, N. Mex. LOB Angeles 15, Calif. l-,^\ No. 10 204 S. 10th St. 112 West 9th St. OCTOBER 1953 Atlanta 3, Ga. Memphis 3, Tenn. 86 Forayth St. NW. 229 Federal Bldg. Boston 9, Mass. Miami 32, Fla. 261 Franklin St. 36 NE. First St. Buffalo 3, N. Y. Minneapolis 2, Minn. 117 Ellieott St, 607 Marqoette Are. Charleston 4, S. C. New Orleans 12, La. Area 2. 333 St. Charles Ave. Sergeant Jasper Bldg. PAGE Cheyenue, Wyo. New York 13. N. Y. THE BUSINESS SITUATION 1 307 Federal Ofiice BIdg. 346 Broadway National Income Trends 3 Chicago 1, III. Philadelphia 7, Pa. Financing Business Investment ....... 5 221 N. LaSaile St. 1015 Chestnut St. Phoenix, Ariz. Area Shifts in International Transactions . 8 Cincinnati 2, Ohio V, Second Ave. 755 U. S. Post Office and Ctistom House Pittsburgh 22, Pa. * * T»T 717 Liberty Are. Cleveland 14, Ohio 925 Enclid Am Portland 4, Oreg. SPECIAL ARTICLES 520 SW. Morrison St. Dallas 2. Tex. Agricultural Marketing and Income 11 lll4Coinm«rcsSi* Reno, NOT. United States Foreign Aid in Fiscal Year 1953 . 15 1479 Wella ATO, Denver 2, Colo. 142 New Custom Honit Richmond, Va. * * * 400 East Main St. Defroit 26, Mich. 1214 Griswoid St. St. Louis 1, Mo. 1114 Market Si. MONTHLY BUSINESS STATISTICS . S-l to S-40 El Paso, Tex. Chamber of Commerce $a]t Lake City 1, Utah Statistical Index . Inside back cover Bldg. 109 W. Second St. So. Houston, Tex. San Francisco 2, Calif. 430 Lamar St. 870 Market St. Jacksonville 1. Fla. Saraanah, Ga. 311 W. Monroe Ss. 125-29 Bull St, Published by the U. S. Department of Commerce, SINCLAIR WEEKS, Kansas City 6, Mo. Seattle 4, Wash. Secretary. Office of Business Economics, M. JOSEPH MEEHAN, 911 Walnut St. 909 First Ave. Director. Subscription price, including weekly statistical supplement, is $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- ments, United States Government Priming Office, Washington 25, D. C, Special subscription arrangements, including changes of address, should he For local telephone listing, consult section made directly with the Superintendent of Documents. Make checks payable devoted to U. S. Government to Treasurer of the United States. OCTOBER 1953 uauon By the Office of Business Economics BBUSINES, S activity in the closing weeks of the summer Personal Income continued at a high rate, with the large flow of income to individuals remaining the mainspring in the maintenance of a strong consumer demand. Some of the basic economic indi- This year higher personal income has stemmed cators, however, have either stabilized or eased off from their from advances in the private nonfarm sector highest levels. These tendencies reflect a lessening in the $ BILLION (SEASONALLY ADJUSTED, AT ANNUAL RATES) intensity of demand for some products, although apparent 350 shifts in the seasonal movements in some cases make it diffi- cult to evaluate the basic trends. TOTAL PERSONAL INCOME The flow of personal income, at a $287 billion seasonally 300 adjusted annual rate in both July and August, was about 1 percent above the second quarter average. As indicated by the chart, payroll disbursements in the distributive and serv- 250 ice industries, which lagged behind the commodity-producing industries in the payroll spurt during the last half of 1952, have accounted for an increasing proportion of this year's 200 payroll advance. Since the start of the year employment in this area, which covers trade, transportation, utilities, fi- PRIVATE NONFARM INCOME nance, and the service industries proper, has advanced by 150 almost one quarter of a million persons and average earnings have shown a steady rise. Disbursements in these indus- tries account for about half of private industry employee 100 compensation. Unemployment, which fell to a postwar low of 1.2 million in August, was unchanged in September. Nonagricultural FARM INCOME employment dropped as students returned to school. In August sales of retail stores failed to recover as much as INCOME FROM GOVERNMENT usual from July and showed a 2 percent decline on a season- ally adjusted basis. Consumer credit outstanding was $0.2 billion higher in August than in July, an increase little more than half the average rise during the past year; as usual, most of the latest expansion represented installment Distributive and service industries account for an • loans for the purchase of automobiles. increased share of private PAYROLL gains Business buying is becoming more closely adjusted to $ BILLION (SEASONALLY ADJUSTED, AT ANNUAL RATES) current sales levels, as indicated by the slackened rate of inventory accumulation. Inventories held by manufactur- COMMODITY- ing and trade firms increased on a seasonally adjusted PRODUCING book-value basis by $450 million in August as compared INDUSTRIES DISTRIBUTIVE AND SERVICE INDUSTRIES to $650 million in July and a $700 million average monthly rate in the second quarter. Physical additions to inventories were down from the second quarter somewhat more than the book-value data would indicate, as higher replacement costs were absorbing a larger share of the dollar increases. Most of the August accumulation was at the manufactur- ing level, with the increase in stocks equally distributed between durable goods' producers and nondurable goods manufacturers. The August advance in trade inventories I 234 I 2 3* was less than $100 million, after seasonal correction. 1952 1953 The adjustment of inventory investment from the excep- CHANGE FROM PRECEDING QUARTER tional second quarter rate was taking place without much * BASED UPON JULY AND AUGUST DATA disturbance to the long-continued stability of prices. The U. S. DEPARTMENT OF COMMERCE. OFFICE OF BUSINESS ECONOMICS 53-116-I wholesale price index, after a small increase in July, was ^ little changed in August and September. Downward adjust- 273279°— 53 SURVEY OF CURRENT BUSINESS October 1953 ments in recent weeks in some of the crude or semifabricated Preliminary figures for September indicated that produc- industrial materials, especially certain metals, including tion of television receivers has been maintained at the high steel scrap, lead, and zinc, were roughly offset by some August rate of over 7.2 million sets per year. recovery in copper scrap and tin, and by minor changes in The steel industry, after experiencing an extended period of other sectors of the price structure. The consumers price capacity operations, has been operating under less pressure iil^ index continued to edge up, with most major segments show- the most recent months. This is also true of certain other ing fractional rises in August, but the entire change from industries where operations previously had been maintained a year ago has been about one-half of 1 percent. at or near capacity rates to meet final demand and inventory augmentation. Supplies of finished steel products, with few New and unfilled orders off exceptions, have reached an approximate balance with de- mand. Since inventories in the hands of fabricators have During the second quarter, manufacturers' new orders, been rebuilt to a point where they are now at or close to seasonally adjusted, had reached their highest level since normal, inventory demand has dwindled. Some metal-using the early days of the defense buildup. In July and August industries are now consuming less steel than in earlier months, they declined substantially, chiefly as a result of the cancel- partly because of seasonal variations, while others have lation of orders for military hard goods. Hence, the cutback shortened their forward commitments in the belief that in new orders, which are reported net of cancellations, was ample supplies will be available to satisfy near-term require- confined to the durable goods industries; in the nondurables, ments. July and August new orders maintained the high volume of Reflecting these changed conditions, steel mill operations the second quarter. in the third quarter averaged 93 percent of rated capacity in Most affected by the summer new order reduction were effect on January 1, 1953. This rate in terms of tonnage the industries in the transportation equipment group, which was equivalent to 27.6 million tons of steel ingots and includes the aircraft and motor vehicle companies; new castings, moderately below the near-capacity volume of the orders in this group, net after cancellations, were only 59 first half of the year but higher than in any quarter prior to percent of shipments for the 2 months. The unfilled orders last October. backlog remaining, although down $2 billion since June, In September, some loss of production resulted from a 2- still amounted to over 9 months' shipments at the August week work stoppage affecting a portion of the industry. rate. Substantial reductions also occurred in the new orders Following settlement of the dispute, the weekly rate then of the primary metal and machinery industries the latter recovered to about 95 percent of rated capacity, or some- group having some defense orders canceled while the former what higher than the average for August. was affected by reduced order placements for steel and The high rate of steel operations since September 1952, nonferrous metals. when the industry had completely recovered from the effects New orders received by the fabricated metal products of the steel shutdown in midsummer of that year, is reflected group and the "all other" durables group, whose products in the record flow of semifinished and finished steel products/ are destined to a relatively greater extent for civilian use, to domestic consumers (domestic production plus imports held up better than other durable goods industries. minus exports). New construction volume, because of exceptionally favor- (Millions of short tons) able building weather in early spring, has not risen as much as 1950 1951 1952 1953 1st quarter 15.6 19.7 19.0 20.5 is usual since then; nevertheless, the amount put in place 2d quarter 17.