OCTOBER 1938 SURVEY OF CURRENT BUSINE UNITED STATES DEPARTMENT OF COMMERCE BUREAU OF FOREIGN AND DOMESTIC COMMERCE WASHINGTON VOLUME 1 8 NUMBER 10 Of Monthly Encome Payments In the United States Income payments to individuals turned upward during the third quarter of the year after recording a 2-year low in May. The Bureau's seasonally adjusted index of income payments has recovered one-fifth of the loss during the 9-month recession that began last August. Income payments in August were 9 percent below the recovery high of last year, and for the first 8 months averaged 7 percent below the corresponding period of 1937. The revised estimates of monthly income payments are discussed in an article on page 15, with the detailed estimates from January 1929 to date. Volume 18 Number 10 UNITED STATES DEPARTMENT OF COMMERCE DANIEL C. ROPER, Secretary BUREAU OF FOREIGN AND DOMESTIC COMMERCE ALEXANDER V. DYE, Director SURVEY OF CURRENT BUSINESS OCTOBER 1938 A publication of the DIVISION OF BUSINESS REVIEW M. JOSEPH MEEHAN, Chief TABLE OF CONTENTS CHARTS AND SUMMARIES SPECIAL ARTICLE Page Page Business indicators , 2 Revised estimates of monthly income payments in the United States.. 15 Business situation summarized 3 Commodity prices 7 STATISTICAL DATA Domestic trade 8 Employment 9 Weekly business statistics through September 24, 1938 21 Finance 10 Monthly business statistics 22 Foreign trade 11 Construction and real estate 14 General index Inside back cover Subscription price of the monthly and weekly issues of the SURVEY OF CURRENT BUSINESS is $2.00 a year. Single-copy price: Monthly, 15 cents; weekly, 5 cents. Foreign subscriptions, $3.50. Price of the 1936 Supplement is 35 cents. Make remittances only to Superintendent of Documents, Washington, D. C. 96551—38- -1 1 SURVEY OF CURRENT BUSINESS October 1938 Business Indicators INDUSTRIAL PRODUCTION *f MONTHLY INCOME PAYMENTS** i 140 INDEX NUM8EF S, (l92J>- 25 = 100) 120 INDEX NUf•1BERS ( 929 = 1 oo) 130 110 120 J\ /"V 100 ^ 110 ; \ i 90 V ^\ A s^ 100 V 80 /V ^ U»^ 90 V Jl u / \ 70 ,-^ 80 f\ V V A Ix/y 60 70 ^ \ 'V ^ 50 60 Vi 40 50 30 < B 1 fo 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 FACTORY EMPLOYMENT AND PAYROLLS RETAIL SALES ** 130 INDEX NUMBER S, (192-$- 2.? = 100) 140 120 1 A « M 130 ft\ no AA IM 120 -t — RU =iAL SALES -GENERAL MERCHANDISE f f\\ A, (1929 -V =100) ^ 100 KA**v/vA v 110 FACTORY EfvIPLOYMENT/ / A ( i ADJUSTE r 90 \ ( o) A V ^ 100 i! ! '\ y/y\l /\ j ,,/L ^ 80 Af V-r^ J \V \X ^\ 90 \ i •^VA A / /I A\ K r JL,A V 80 70 r /v \l v 60 \VJ^/V \ 70 \ - FACTC RY PAY ROLLS V A• DEPARTMENT STORE SALES / *• * (UNADJUSTE D) (1923- 25 = 100) 50 i 60 40 V ii 50 j •5 : ; 0 J "o 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 ^ CONSTRUCTION CONTRACTS AWARDED* •* WHOLESALE PRICES s N 140 INDEX NUMBERS, (l92 3- 25 : lOO) V\ INDEX r^UMBtR S, (1926 = too) 100 j 120 iL 90 H Fl WISHED PRODIJCTS v^ \ •^r _ 100 \l\ ^Jn 80 /*£^\7C !i> 80 , i/ SEMI- MANUFACTURE:s 70 \ Vs\ TOTAL-*/ \ \ i .j / ^/K"V 60 \hivv k^s\SA 60 w\ I 1/1 V/ v^, 40 "\ / / 50 \ RAW hMTERI/^LS — ' Vo > RES 1DENTI / ^—-\ y 20 L/ •I 40 -^vv**"/ y- •5 : 0 S r o 1929 1930 193! 1932 1933 1934 1935 1936 1937 1938 1929 1930 1931 1932 1933 1934 1935 i936 1937 1938 * ADJUSTED FOR SEASONAL VARIATION * THREE-MONTH MOVING AVERAGE t VOLUME BASIS * DOLLAR BASIS D p 1402 October 1938 SURVEY OF CURRENT BUSINESS Business Situation Summarized OMESTIC business conditions improved during general trend is indicated by the change in the steel DSeptember, extending the forward movement in industry—from a low this year below one-fourth of progress since June. Industrial activity increased at a ingot capacity output expanded until at the end of more-than-seasonal rate in response to the rising volume September nearly half of the capacity was engaged. of orders from distribution groups. Primary distri- At the peak in 1937 the ingot rate was above 90 percent bution, as reflected by the movement of freight-car of capacity. The automobile industry has not been a loadings, also expanded by more than the normal major factor in the rise in steel production to date, since seasonal rise. Improvement in the building industry assemblies of new cars have remained at a seasonal low. has had an important bearing on the general trend. October is expected to bring a sharp advance in auto- Government projects have been let recently in enlarged mobile production. volume under the public works program, and activities Activity in consumer-goods industries has been well in the residential field still constitute a constructive above the midsummer rate. Production of textiles, business influence. Since September 1937 was a month leather manufacturers, and tobacco manufacturers, of sharp contraction in business activity, in contrast among others, has advanced. Demands for industrial with the recent trend, comparisons with a year ago now ELECTRICAL GOODS-NEW ORDERS MACHINE TOOL ORDERS make a better showing than was true in the mid-summer MILLIONS OF DOLLARS VALUE-INDEX NUMBERS. 1926 SHIPMENTS = 100 months. International developments during the month influ- enced business sentiment and directly affected price movements on security and commodity exchanges. Prospects of a general war in Europe became immediate during the month as the German-Czechoslovak con- troversy over the Sudeten area reached a climax. European currencies weakened, and there was a tre- mendous flow of gold to this country. Foreign bond "averages" dropped, with wide declines in numerous issues. Following the Munich agreement the markets generally reversed these movements. Changes in our foreign trade in August, however, the latest month for which data are available, were influ- enced more by domestic than by foreign events. The Figure 1.—New Orders for Electrical Goods and Machine Tools, 1929-38. rise that has occurred in industrial output during recent (Bureau of the Census and National Machine Tool Builders' Associa- months has caused a sharp increase in demands for tion.) imported raw materials, and the general improvement in fuels (coal and electric power) have expanded, as well business has occasioned larger demands for finished as those for industrial materials for fabrication. products from abroad. Exports of finished products Retail trade has improved with the advent of the fall reflected the less favorable economic situation in the season, but the changes in distribution to consumers on major foreign countries; but the maintenance of agri- a seasonally corrected basis have not been so pronounced cultural exports at a relatively favorable rate, and more as those in industrial activity. Trade did not experi- particularly a sharp advance in tobacco shipments, ence the abrupt decline that occurred in production last resulted in a moderate (though less-than-seasonal) rise year, following more closely the trend of the volume of in total exports. income payments, which at the low in May were off Industrial production has recovered to about the level about 11 percent from the 1937 high. As outlined in reached last November in the downward movement the article on page 15, aggregate income payments have initiated in the third quarter of 1937. Increases in pro- moved definitely upward during recent months, mainly duction in both the durable-goods and nondurable-goods by reason of the rise in payments for labor services. industries have occurred recently as the recovery move- ment broadened. Industries of the former type ex- Employment and Unemployment Trends. perienced the more rapid contraction in 1937 (note the Employment conditions have improved generally extent of the decline in orders for machine tools and since midsummer. The aggregate gains to date have electrical equipment indicated in fig. 1), and have only been sufficient to relieve only to a moderate extent the recently recovered a substantial part of the loss. The heavy volume of unemployment, and the total number SURVEY OF CURRENT BUSINESS October 1938 of workers employed in nonagricultural pursuits in these figures, which include persons normally engaged in August was still nearly 9 percent lower than a year both agricultural and nonagricultural pursuits, the earlier, according to the estimate of the Bureau of Labor aggregate volume of unemployment was around 10.6 Statistics; nevertheless, the increase in factory employ- million in August. The Board's estimates consider as ment and pay rolls since July has been much larger than unemployed those persons referred to in the preceding the usual seasonal rise. paragraph, as well as the members of the Civilian In August the number of persons at work in nonagri- Conservation Corps. cultural pursuits increased to 32.0 million, and there The aggregate volume of unemployment increased are evidences of a further gain this month. The esti- sharply after September of last year, when the num- mate for August compares with a 1929 peak of 37.0 ber of persons out of work had declined to a recovery million; the depression low of 25.9 million in March low of 5.7 million. From February through May of 1933; and the recovery high of 35.1 million in Septem- this year the number of unemployed averaged over 11 ber 1937. These estimates of nonagricultural employ- million persons. The severity of the unemployment ment cover all persons engaged in gainful work outside situation is indicated by a comparison of this figure of agriculture, including self-employed and casual work- with the peak of 14.7 million in March 1933 and an average of 12.5 million during 1932.