AUGUST 1938 SURVEY OF CURRENT BUSINESS UNITED STATES DEPARTMENT OF COMMERCE BUREAU OF FOREIGN AND DOMESTIC COMMERCE WASHINGTON VOLUME 18 NUMBER 8 Trends in the Production and Absorption of Rubber are discussed in the special article on page 11. Interesting facts regarding the history and the present statistical position of the rubber industry are reviewed. The contribution of the various producing areas to the total available supply of rubber, and the relative importance of the various consuming countries are discussed. Fluctuations in prices are described with special reference to the effects of the several restriction plans which have been in operation at various times. Important yearly statistics for production, absorption, and stocks of rubber are given, together with several charts depicting industry trends over a period of years. Residential Vacancies in the cities where surveys have been made this year were higher than a year ago. The average 1937 urban vacancy in all report- ing cities was about 2 to 3 percent, compared with an average of between 8 and 9 percent in late 1932. A tabulation of vacancy figures for over 60 cities, covering the period 1930—38, is presented in the article on page 15. Vacancies have an important bearing on the prospective volume of new building, and the partial data presented give an indication of the trend during recent years. Volume 18 Number 8 UNITED STATES DEPARTMENT OF COMMERCE DANIEL C. ROPER, Secretary BUREAU OF FOREIGN AND DOMESTIC COMMERCE ALEXANDER V. DYE, Director SURVEY OF CURRENT BUSINESS AUGUST 1938 Prepared in the DIVISION OF ECONOMIC RESEARCH LOWELL J. CHAWNER, In Charge M. JOSEPH MEEHAN, Editor WALTER F. CROWDER, Acting, Editor CONTENTS CHARTS AND SUMMARIES SPECIAL ARTICLES Page Page Business indicators 2 Trends in the production and absorption of rubber 11 Business situation summarized 3 Residential vacancies in the United States, 1930-38 15 Commodity prices 5 STATISTICAL DATA New or revised series: Domestic trade 6 Table 65. Employment and pay rolls in nonmanuf acturing in- Employment 7 dustries 19 Table 66. Electric power production 20 Finance 8 Weekjy business statistics through July 30, 1938 21 Foreign trade 9 Monthly business statistics 22 Construction and real estate 10 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. 1 SURVEY OF CURRENT BUSINESS August 1938 Business Indicators INDUSTRIAL PRODUCTION MONTHLY INCOME PAYMENTS ** 120 140 INDEX NUMBERS, (l92}~ 25- IOO) INDEX NUr•1BERS (|929 = 1oo) 130 110 120 100 NO 7 90 100 80 f / 90 70 3 V 80 Vi 60 *\T 70 50 60 v 40 50 30 3 I 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** FACTORY PAYROLLS DEPARTMENT STORE SALES ^UNADJUSTED) (1925- 2.5 = IOO) 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 140 INDEX NUMBERS, (i92 = IOO) 120 100 80 \ TO TAL->^ 60 \ ^ \rVvV 40 A / RESIDENTI> 20 0 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 # * ADJUSTED FOR SEASONAL VARIATION THREE-MONTH MOVING AVERAGE + VOLUME BASIS + DOLLAR BASIS D.D. 9402 August 1938 SURVEY OF CURRENT BUSINESS Business Situation Summarized ENERAL improvement in business activity oc- Purchases of primary raw materials increased during G curred during July. Industrial production in- July with prices moving upward. The advance in se- creased contraseasonally, and consumer purchases curity prices extended the movement begun in the did not experience the usual summer decline. Freight- middle of June. Industrial share quotations estab- car loadings increased more than seasonally. Sensi- lished new highs for 1938 on July 25 and at this point tive commodity prices were bid up as buying appeared had recovered one-half of the loss incurred since the in the best volume in several months. Although this broad downward movement in security prices began in forward movement in business activity has not as yet August of last year. Railroad shares also advanced, proceeded very far and the general level is still much but so far the average for this group has recovered less below that of last year, it is significant in that it repre- than one-third of the loss since last August. Trading on sents a reversal of the downward trend which had ex- security markets was active in July, the rate of turn- tended through the first half of the year. It is also over approximating that of the last 2 weeks of June. noteworthy that the change has come during a normally dull season of the year. MILLIONS OF DOLLARS 1201 The aggregate volume of industrial production in- creased in July, moving counter to the usual seasonal change. The decisive upward movement in the ad- justed production indexes for July extended the slight gain of the preceding month. Steel-mill activity ad- vanced in response to a renewed flow of orders, largely from miscellaneous sources. The rate of operations was moved up from 29 percent of capacity at the end of June to 37 percent in the final week of July. Whereas there is usually a sizable seasonal contraction during the month, ingot output approximated 33 percent of capacity as compared with a June rate of 28 percent. Automobile production in July was curtailed more than seasonally, as several producers completed assembly of 1938 models in the latter part of the month. Home Mortgages Selected for Appraisal and Home Mortgages Accepted for Textile-mill activity, according to partial data, was Insurance by Federal Housing Administration. maintained in July at a better-than-seasonal rate in A feature of the general situation is the extent to continuation of the movement of the 2 preceding which retail sales have resisted the usual midsummer months. Mill consumption of raw cotton in June slump. Department-store sales in July, after allowance (seasonally corrected) was 14 percent higher than in for the usual seasonal contraction, showed a continuation April; in the earlier month cotton consumption was at of the improvement noted in June. Sales of new passen- a very low figure. Purchases of textiles were reported to ger automobiles in July have reacted to the general im- have slowed somewhat in July after the brisk activity provement in the business outlook. Final reports for in the latter part of June. June, however, show that the dollar volume of passenger- Bituminous coal production advanced more than sea- car sales was down more than seasonally from May. sonally in July, extending the moderate gains of the pre- Developments in the field of residential building ceding month. The flow of crude petroleum increased have been constructive. Residential contracts awarded as the enforcement of Saturday shut-downs in the im- in the first half of July showed a sizable contraseasonal portant Texas fields was abandoned; output was, how- gain from the June daily average and were 2 percent ever, 7 percent lower than a year ago. Stocks of gasoline higher than in the same weeks of 1937. The dollar declined in July as consumption increased seasonally, volume of residential awards in June was the largest for but were still 6 percent higher than last year. Refinery any month within a year. Construction awards, other operations were stepped up slightly during the month. than residential, did not make so favorable a showing as Primary distribution, as measured by freight-car load- residential building in June and the first half of July, but ings, increased more than seasonally during July. The the extensive public works program will be an important grain movement, reflecting the large wheat harvest, was factor in heavy construction during coming months. the heaviest since 1930. Shipments of manufactured The home mortgage financing activities of the Fed- goods, as indicated by the movement of miscellaneous eral Housing Administration have increased sharply freight, increased contraseasonally. in recent months. (See the accompanying chart.) SURVEY OF CURRENT BUSINESS August 1938 The volume of mortgages accepted for appraisal and compiled by the Bureau of Foreign and Domestic for insurance have recorded substantial gains over the Commerce, declined from 78.6 (1929 = 100) in May to same months of 1937. In the 3-week period ended 78.2 in June. At the June level this index was the July 23, the volume of mortgages accepted for appraisal lowest since May 1936 and was more than 10 points was more than double that of the same weeks of last below the recovery high of 88.6 in August 1937. year; in June, the increase over a year ago was 76 per- cent. (INDEX-I926-I00) Although a part of the volume of mortgages insured «M» OX WtOXCSOAY lasiK /vice by the Federal Housing Administration represents refi- 348 INOUSTR ALS nancing of existing mortgages, it should be noted that 71 percent of all mortgages insured in the second quar- / ^ r v7 N V 40 PUBL C UTILITIES-^ ter of this year were on new homes (homes completed ... /^ A,.x / A/ after or 1 year prior to application for mortgage insur- A. ance) as compared with 56 percent for the same months 32 RAILROADS-' of 1937. The increase in the mortgage insurance activ- ities of the Federal Housing Administration after Feb- 1 1 i 1 1 1Mill Ml III 1MM 1 1 1II II I Ml 1 1 ii 1 I i i i i ruary of this year reflects to some extent the influence of the liberalized amendments to the Housing Act that Movement of Stock Prices by Major Groups, 1935-38 (Standard Statistics became effective early in the year—the percent of ap- Co., Inc.).