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LIBRARY OF‘
CONGRESS.

 

ECONOMIC INDICATORS

ISSUE BRIEF NUMBER IB7504l

AUTHOR:
LAYMANo LAURA A.

ECONOMICS DIVISION

THE LIBRARY OF CONGRESS
CONGRESSIONAL RESEARCH SERVICE

MAJOR ISSUES SYSTEM

DATE ORIGINATED Q§L23L1§
DATE UPDATED D3L2&£§ﬂ

FOR ADDITIONAL INFORMATION CALL 287-5700

0324

CRS- 1 IB75041 UPDATE-O3/24/80

ISSUE .E._D" :’  ‘

THIS ISSUE BRIEF PRESENTS DATA FROM THE LATEST AVAILABLE ESTIMATES OF
SELECTED ECONOMIC SERIES DEALING WITH PRODUCTION AND PRICES IN THE U.S.
SECONOMY. BRIEF DESCRIPTIONS OF THE SERIES ARE GIVEN UNDER THE BACKGROUND
I/BACK) OPTION. THE REFERENCE (/REFS) OPTION LISTS SOURCES OF MORE DETAILED
DESCRIPTIONS AND BACKGROUND INFORMATION. CURRENT DATA IS LISTED BY DATE
RELEASED UNDER THE CHRONOLOGY (/CHRN3 OPTION. IN ORDER TO PROVIDE
INFORMATION WHICH BEST DESCRIBES THE STATE OF THE ECONOMY IN THE CURRENT
PERIOD. ALL DATA REFERRING TO PERIODS OF LESS THAN A FULL YEAR ARE SEASONALLY
ADJUSTED WHERE APPROPRIATE.

GNP

THE GROSS NATIONAL PRODUCT (GNP) REPRESENTS THE DOLLAR VALUE OF THE
NATION'S PRODUCTION OF GOODS AND SERVICES. IT IS THE SUM OF THE CATEGORIES
OF FINAL DEMAND: PERSONAL CONSUMPTION EXPENDITURES (PCE). GROSS PRIVATE
DOMESTIC INVESTMENT (GPDI!o NET EXPORTSo AND GOVERNMENT PURCHASES OF  GOODS
AND SERVICES. THE OUTPUT OF ONE BUSINESS WHICH IS USED UP IN THE PRODUCTION
OF ANOTHER BUSINESS OR IS FURTHER PROCESSED BEFORE BEING SOLD TO FINAL‘ USERS
IS CALLED INTERMEDIATE OUTPUT AND IS NOT COUNTED SEPARATELY SINCE ITS VALUE
IS INCLUDED IN THE VALUE OF FINAL PRODUCTION» EXCEPT WHEN IT CONTRIBUTES TO A
CHANGE IN THE INVENTORY HOLDINGS OF A BUSINESS. THE NET CHANGE IN
T“VENTORIES IS COUNTED AS PART OF GROSS PRIVATE DOMESTIC INVESTMENT (POSITIVE
L EN INVENTORIES ARE GROWINGo NEGATIVE INVESTMENT WHEN INVENTORIES ARE
DECLINING). GPDI ALSO INCLUDES BUSINESS PURCHASES OF PLANT AND DURABLE
EQUIPMENT: AND PURCHASES OF DWELLINGSo BOTH OWNER OCCUPIED AND RENTAL.

PERSONAL CONSUMPTION EXPENDITURES INCLUDE ALL EXPENSES OF CONSUMERS AND
NONPROFIT INSTITUTIONS: INCLUDING RENT FOR DWELLINGS AND A COMPARABLE
ESTIMATE (CALLED AN IMPUTATION) FOR THE VALUE THE HOMEOWNER RECEIVES FROM HIS
DWELLIN39 BUT EXCLUDING PURCHASES OF OWELLINGS AND RELATED EXPENSES. PERSONAL
TAXES» AND INTEREST ON CONSUMER DEBT.

ICﬂE§IAﬂI;ﬂﬁLLA3;ﬁﬂB;‘ALSO CALLED "REAL GNP" REPRESENTS THE SAME PRODUCTION
AS THE CURRENT DOLLAR GNP. BUT VALUED AT THE PRICES OF A CHOSEN VALUATION
YEAR.L IT IS CALCULATED BY SEPARATING THE CURRENT DOLLAR GNP INTO THE
GREATEST DETAIL PRACTICABLEv AND DEFLATING THE PARTS BY APPROPRIATE PRICE
INDEXES.

THE RATIO OF CURRENT DOLLAR GNP TO CONSTANT DOLLAR GNP IS THE IMPLICIT
PRICE DEPLATOR FOR THE GNP. THE PERCENT CHANGE IN THIS RATIO IS A MEASURE OF
INFLATION IN THE TOTAL ECONOMY. ALL PRICE INDEXES BASED ON FIXED WEIGHTS ARE
LIMITED BY THEIR INABILITY TO MEASURE THE EFFECTST OF SHIFTS BETWEEN
CATEGORIES WHICH HAVE EXPERIENCED LARGER THAN AVERAGE PRICE INCREASES AND
CATEGORIES WHICH HAVE EXPERIENCED LOWER THAN AVERAGE PRICE INCREASES. TO
AVOID THIS PROBLEM AN ALTERNATIVE MEASURE IS CONSTRUCTED WHICH WEIGHTS PRICE
CHANGES FROM ONE PERIOD TO THE NEXT BY EXPENDITURES IN THE FIRST PERIOD.
T 3 INDEX» WHICH IS CALLED A CHAIN PRICE INDEX» IS THE PUREST MEASURE OF
PRICE C4ANGE OVER THE INTERVAL FOR WHICH IT HAS BEEN SPECIFICALLY CALCULATED.
BUT. UNLIKE THE IMPLICIT PRICE DEFLATURSv IT DOES NOT PROVIDE A CONTINUOUS
TIME SERIES WHICH COULD BE USED TO CALCULATE CHANGES BETWEEN ANY TWO PERIODS.

CRS- 2 IB75041 UPDATE-O3/24/30

THE GROSS NATIONAL PRODUCT AND ITS COMPONENTS ARE ESTIMATED ANNUALLY AND

QUARTERLY BY THE BUREAU OF ECONOMIC ANALYSIS IN THE DEPARTMENT OF COMMERCE.

PRELIMINARY FIGURES ARE RELEASED ABOUT 15 DAYS AFTER THE END OF A QUARTER.
UNTIL RECENTLY. "FINAL" ESTIMATES WERE RELEASED ABOUT 45 DAYS AFTER THE END
OF THE QUARTER AND WERE REVISED A MONTH LATER ONLY TO INCORPORATE ADDITIONAL
DATA ON INVESTMENT INCOME FROM ABROAD. IN ACCORDANCE WITH A RECOMMENDATION
OF THE ADVISORY COMMITTEE ON GROSS NATIONAL PRODUCT DATA IMPROVEMENT.
BEGINNING WITH THE ESTIMATES FOR THE THIRD QUARTER OF 1977. A SECOND
COMPREHENSIVE REVISION OF THE QUARTERLY ESTIMATES IS RELEASED 75 TO 80 DAYS
FOLLOWIVG THE END OF THE QUARTER. THESE ESTIMATES WILL THEN REMAIN IN EFFECT
UNTIL JJLY OF THE FOLLOWING YEAR. WHEN THE FIRST ANNUAL ESTIMATES FOR THE
LATEST CALENDAR YEAR AND REVISIONS OF ANNUAL DATA FOR THE TWO PREVIOUS YEARS
AND QUARTERLY DATA FOR THE FULL THREE YEARS ‘ARE RELEASED. APPROXIMATELY
EVERY TEN YEARS A COMPLETE OVERHAUL. KNOWN AS A BENCHMARK REVISION. IS MADE.
THIS INZORPORATES THE EXTENSIVE INFORMATION OBTAINED FROM THE ECONOMIC
CENSUSES (THE BENCHMARKS OF THE NATIONAL INCOME AND PRODUCT ACCOUNTS). THE
BENCHMARK REVISIONS ALSO PROVIDE AN OPPORTUNITY TO INCORPORATE DEFINITIONAL
CHANGES. WHICH ARE NEVER MADE AT OTHER TIMES. SUCH CHANGES MAY BE MADE
EITHER BECAUSE IMPROVED DATA AND/OR TECHNIQUES ALLOW THE USE OF MORE PRECISE
OR APPROPRIATE DEFINITIONS. OR TO REFLECT ACTUAL CHANGES IN ECONOMIC
RELATIONSHIPS. THE MOST RECENT BENCHMARK REVISIONS WERE COMPLETED IN 1976.
AT THAT TIME THE VALUATION YEAR FOR CONSTANT DOLLAR ESTIMATES WAS CHANGED
FROM 1958 TO 1972. ‘

PERSONAL INCOME

PERSONAL INCOME IS THE TOTAL INCOME RECEIVED BY PERSONS FROM ALL SOURCES-
IN ADDITION TO WAGE AND‘ SALARY PAYMENTS IT INCLUDES THE EARNINGS C
PROFESSIONALS. FARMERS AND UNINCORPORATED BUSINESSES; INCOME FROM RENTS AND
THE IMPUTED INCOME FROM OWNER OCCUPIED DWELLINGS3 DIVIDENDS AND PERSONAL
INTEREST INCOME: AND TRANSFER PAYMENTS SUCH AS SOCIAL SECURITY BENEFITS AND
UNEMPLOYMENT INSURANCE BENEFITS. PERSONAL INCOME IS MEASURED BY THE BUREAU
OF ECONOMIC ANALYSIS. AND IS AVAILABLE MONTHLY. I

NATIDNALBINCDME

NATIONAL INCOME IS THE TOTAL RETURN TO LABOR AND PROPERTY FROM THE
NATION'S PRODUCTION. IT DIFFERS FROM PERSONAL INCOME IN THAT IT INCLUDES
UNDISTRIBUTED CORPORATE PROFITS. CORPORATE PROFITS TAXES. AND SOCIAL SECURITY
TAXES: AND EXCLUDES CONSUMER AND GOVERNMENT INTEREST PAYMENTS AND TRANSFER
PAYMENTS. WHICH. BY DEFINITION. ARE NOT PAYMENTS FOR CURRENT PRODUCTIVE
SERVICES. NATIONAL INCOME PLUS INDIRECT BUSINESS TAXES. CAPITAL CONSUMPTION
ALLOWANCES (THE ESTIMATED VALUE OF CAPITAL GOODS USED UP IN THE PRODUCTION OF
GNP). AND SOME MINOR ITEMS IS THE GROSS NATIONAL PRODUCT VIEWED AS A SUM OF
INCOME FLOWS (THE COST OF PRODUCTION PLUS PROFITS).

THE LARGEST ITEM IN NATIONAL INCOME IS COMPENSATION (OF EMPLOYEES.) WHICH
INCLUDES WAGE AND SALARY PAYMENTS. EMPLOYER CONTRIBUTIONS TO SOCIAL
INSURANCE. AND OTHER. SUPPLEMENTS TO WAGES AND SALARIES. THE CORPORATE
PROFITS COMPONENT OF NATIONAL INCOME IS ADJUSTED TO REMOVE THE DISCREPANCI"
CAUSED BY THE FACT THAT DIFFERENT BUSINESSES USE DIFFERENT METHODS OF VALUIHQ
INVENTORY. THE ITEM USED FOR THIS. WHICH IS LABELED THE “INVENTORY VALUATION
ADJUSTMENT“. IS AN ESTIMATE OF THE DIFFERENCE BETWEEN CORPORATE PROFITS AS

CRS- 3 IB75D41 UPDATE-O3/24/80

REPORTED AND WHAT PROFITS WOULD BE REPORTED IF ALL FIRMS VALUED INVENTORIES

AT REPLACEMENT COST. A SIMILAR ADJUSTMENT IS MADE FOR THE INCOME OF‘

UNINCORPORATED‘ENTERPRISES.

    

BECAUSE ' WHICH IS THE MOST VARIABLE: AS WELL AS ONE OF
.nE MOST IMPORTANT COMPONENTS: IS NOT AVAILABLE AS PROMPTLY AS OTHER
INFORMATION: NATIONAL INCOME ESTIMATES ARE NOT RELEASED UNTIL 45 AND 75 DAYS
AFTER THE END OF EACH OF THE FIRST 3 QUARTERS IN EACH YEAR: AND 75 AND 105
DAYS AFTER THE END OF THE LAST QUARTER.

INDEX OF INDUSTRIAL PRODUCTION

THE INDEX OF INDUSTRIAL PRODUCTION MEASURES CHANGES IN REAL PRODUCTION OF

GOODS BY THE NATION'S INDUSTRIES. IT IS CONSTRUCTED BY COMBINING ESTIMATES:

OF PHYSICAL QUANTITIES OF OUTPUT (EITHER MEASURED DIRECTLY OR ESTIMATED FROM
INFORMATION ABOUT INPUTS AND PRODUCTIVITY) WITH WEIGHTS BASED ON THE RELATIVE
IMPORTANCE OF EACH MARKET OR INDUSTRY GROUPING DURING A BASE YEAR (1967 FOR
THE CURRENT PERIOD).  INDUSTRIAL PRODUCTION IS MEASURED BY THE DIVISION OF
RESEARCH AND STATISTICS OF THE FEDERAL RESERVE BOARD. THE INDEX IS AVAILABLE
MONTHLY. -

CONSUMER PRICE INDEX

THE CONSUMER PRICE INDEX (CPI) WHICH IS PUBLISHED BY THE BUREAU OF LABOR
STATISTICS (BLS) OF THE U.S. DEPARTMENT OF LABOR: MEASURES CHANGES» IN‘ THE
COST OF A “MARKET BASKET" OF GOODS AND SERVICES CHOSEN TO REPRESENT THE
1 ICHASES OF CONSUMERS. .CHANGES IN THE PRICES.OF ITEMS IN THE MARKET BASKET
ARE COMBINED: USING EXPENDITURE WEIGHTS DERIVED FROM THE ACTUAL COMPOSITION
OF CONSUMER EXPENDITURES AS DETERMINED BY CONSUMER EXPENDITURE SURVEYS.
THESE SURVEYS: WHICH HAVE BEEN MADE ABOUT EVERY 10 YEARS: HAVE BEEN FOLLOWED
BY MAJOR CHANGES IN THE EXPENDITURES WEIGHTS: AND SOMETIMES IN THE POPULATION
COVERED BY THE INDEX. IN EACH REVISION THE NEW SERIES IS LINKED TO THE OLD
IN ONE MONTH: SO THAT THE CPI IS A CONTINUOUS SERIES: EVEN THOUGH IN
DIFFERENT PERIODS IT HAS MEASURED DIFFERENT THINGS. (THE CPII IS AVAILABLE
MONTHLY BACK THROUGH 1913: ANNUALLY BACK TO 1800.) THE LASTEST REVISION: FOR
WHICH THE LINK MONTH IS DECEMBER 1977: BROUGHT IN EXPENDITURE WEIGHTS BASED
ON THE 1972-4 CONSUMER EXPENDITURE SURVEY. AS A RESULT OF THIS REVISION BLS
IS NOW PUBLISHING TWO CONSUMER PRICE INDEXES. ONE: THE CPI-W: IS A REVISED
VERSION OF THE OLD INDEX WHICH COVERS THE SAME POPULATION OF URBAN WAGE
EARNERS AND CLERICAL WORKERS AND THEIR FAMILIES (PRESENTLY ABOUT 40% OF THE
POPULATION). THE OTHER INDEX: THE CPI-U: COVERS ALL URBAN CONSUMERS (ABOUT
80% OF THE POPULATION). BLS DOES NOT EXPECT ANY SIGNIFICANT DIFFERENCES IN
THE MOVEMENTS OF THESE TWO INDEXES OVER TIME: ALTHOUGH THERE WILL BE SLIGHT
VARIATIJNS IN THE PATTERN OF MONTH-TO-MONTH CHANGES. IF THE TWO SERIES DO
DIVERGE SIGNIFICANTLY THERE WILL PRESUMABLY BE GREATLY INCREASED PRESSURE FOR
ADDITIONAL CPIS COVERING MORE DETAILED SEGMENTS OF THE POPULATION. FOR A
DISCUSSION OF THE ISSUES INVOLVED IN CALCULATING CPIS FOR SPECIFIC
POPULATIDNS SEE THE REPORT ON A CPI FOR THE ELDERLY CITED IN THE REFERENCES
SECTION OF THIS ISSUE BRIEF.

SOMPONENT INDEXES OF BOTH CPIS ARE AVAILABLE IN CONSIDERABLE DETAIL: BY
EXPENDITURE CLASSES: COMMODITY AND SERVICE GROUPINGS: AND FOR SPECIFIC TYPES
OF GOODS AND SERVICES.

CRS- 4 IB75041 UPDATE-O3/24/80

THE SEASONALLY ADJUSTED ONE-MONTH PERCENT CHANGE IN THE CPI IS THE MEASURE
MOST WIDELY REPORTED IN NEWSPAPERS. HOWEVER; SINCE ONE-MONTH ICHANGES ARE
MORE ERRATIC THAN LONGER-TERM MOVEMENTS: AND ARE GREATLY INFLUENCED BY
ROUNDING9 THE SEASONALLY ADJUSTED COMPOUND ANNUAL RATE OF CHANGE OVER THE
MOST RECENT THREE MONTHS IS GENERALLY PREFERRED AS AN ESTIMATE OF THE CURRENT
INFLATION RATE. IN ADDITION» THE PERCENT CHANGE FROM THE SAME MONTH OF THL
PREVIOUS YEAR INDICATES HOW MUCH INFLATION HAS OCCURRED OVER THE PAST 12
MONTHS.

PRODUCER PRICE INDEX

THE PRODUCER PRICE INDEX (PPI) MEASURES AVERAGE CHANGES IN PRICES RECEIVED
IN PRIMARY MARKETS BY PRODUCERS OF COMMODITIES IN ALL STAGES OF PROCESSING»
AND CAN BE ORGANIZED BY STAGE OF PROCESSING OR BY COMMODITY. THE STAGE OF
PROCESSING STRUCTURE ORGANIZES PRODUCTS BY DEGREE OF FABRICATION (FINISHED
GOODS: INTERMEDIATE GOODS. CRUDE MATERIALS). THE COMMODITY STRUCTURE
ORGANIZES PRODUCTS BY SIMILARITY OF END-USE OR MATERIAL COMPOSITION.

THE PRODUCER PRICE INDEX HAS REPLACED THE MEASURE KNOWN AS THE WHOLESALE
PRICE INDEX (WPI). THE CHANGE WAS MADE TO AVOID THE MULTIPLE COUNTING THAT
WAS OFTEN THE RESULT OF THE WEIGHTING STRUCTURE USED IN THE WPI. PRICE
MOVEMENT IN VARIOUS STAGES OF PRODUCTION ISv UNDER THE PRODUCER PRICE INDEX.
ALLOCATED TO THE APPROPRIATE CATEGORY AND THEREFORE COUNTED ONLY ONCE.

IN CALCULATING PRODUCER PRICE INDEXES. PRICE CHANGES FOR THE VARIOUS
COMMODITIES ARE AVERAGED TOGETHER WITH HEIGHTS REPRESENTING THEIR IMPORTANCE
IN THE TOTAL NET SELLING VALUE OF ALL COMMODITIES AS OF 1972. THE PRODUCER
PRICE INDEX IS CALCULATED BY THE BUREAU OF LABOR STATISTICS OF THE DEPARTMENT
OF LABOR FROM MONTHLY PRICE DATA.

LEI.ilS   L AI~.ID.N‘

N/A

 

CﬂB.OJ.‘1.B.EDE1._D.E..E' ‘ ‘

O3/19/80 -- GROSS NATIONAL PRODUCT INCREASED $60.4 BILLION OR 10.5%
AT AN ANNUAL RATE IN THE 4TH QUARTER OF 1979 TO
$2v456.9 BILLIONv ACCORDING TO REVISED FIGURES. IN THE
3RD QUARTER» GNP INCREASED $66.7 BILLION. REAL OUTPUT
(GNP ADJUSTED FOR PRICE CHANGES) INCREASED AT AN ANNUAL
RATE OF 2.0%» COMPARED HITH 3.13 IN THE 3RD QUARTER.
THE SLOHER RATE OF GROWTH WAS ATRRIBUTABLE TO FINAL SALESo
WHICH INCREASED 3.522 COMPARED WITH 6.42 IN THE 3RD

03/18/80 --

03/17/80 --

CRS- 5 IB75041 UPDATE-03/24/80
QUARTER. REAL INVENTORY INVESTMENT CONTINUED TO DECREASE»
BUT NOT AS SHARPLY AS IN THE 3RD QUARTER. PRICES»
AS MEASURED BY THE GNP FIXED-WEIGHTED PRICE INDEX»
9.4$ IN THE 4TH QUARTER» COMPARED WITH 10.0% IN THE
3RD QUARTER. THE GNP IMPLICIT PRICE DEFLATOR ROSE 8.42

IN THE 4TH QUARTER» COMPARED WITH 8.52 IN THE 3RD QUARTER.

ROSE

CORPORATE PROFITS FROM CURRENT PRODUCTION DECREASED

$1.2 BILLION IN THE 4TH QUARTER TO A SEASONALLY ADJUSTED
ANNUAL RATE OF $179.6 BILLION» ACCORDING TO PRELIMINARY
ESTIMATES. BEFORE-TAX BOOK PROFITS INCREASED $3.9 BILLION»
TO $246.2 BILLION. IN THE 3RD QUARTER» PROFITS FROM

CURRENT PRODUCTION INCREASED $4.2 BILLION» AND BEFORE-TAX
BOOK PROFITS INCREASED $14.4 BILLION. THE FOREIGN COMPONENT
OF PROFITS» AS MEASURED BY THE NET INFLOW OF BRANCH ‘
PROFITS AND DIVIDENDS FROM THE REST OF THE WORLD DECREASED
$2.3 BILLION» TO $13.5 BILLION. AFTER-TAX PROFITS INCREASED
$0.5 BILLION TO $148.8 BILLION» DIVIDENDS INCREASED

$1.6 BILLION TO $54.4 BILLION» AND UNDISTRIBUTED PROFITS
DECREASED $1.1 BILLION TO $94.4 BILLION.

PERSONAL INCOME INCREASED $6.9 BILLION IN FEB. TO A
SEASONALLY ADJUSTED ANNUAL RATE OF $2»051.9 BILLION»

WHILE PERSONAL OUTLAYS INCREASED $8.1 BILLION TD $1»675»3
BILLION. IN JAN.» PERSONAL INCOME INCREASED $16.7 BILLION
AND PERSONAL OUTLAYS INCREASED $23.1 BILLION» BASED ON
REVISED ESTIMATES. THERE WAS A SMALLER INCREASE IN
PERSONAL INCOME IN FEB. PRIMARILY BECAUSE JAN. TRANSFER
PAYMENTS INCLUDED GOVERNMENT PAYMENTS OF $4.6 BILLION» AT»
AN ANNUAL RATE» FOR SPECIAL ENERGY ALLOWANCES TO RECIPIENTS
OF SUPPLEMENTAL SECURITY INCOME. IN FEB.» THERE WERE NO
PAYMENTS UNDER THIS PROGRAM. -

CHANGES IN FEB. WERE AS FOLLOWS: WAGE AND SALARY
DISBURSEMENTS» UP $7.9 BILLION (COMMODITY PRODUCING
INDUSTRIES‘ PAYROLLS» UP $2.0 BILLION» AND GOVERNMENT
PAYROLLS» UP $0.8 BILLION): DISPOSABLE PERSONAL INCOME»
$6.3 BILLION: PERSONAL CONSUMPTION EXPENDITURES (PCE1
UP $7.7 BILLION: AND PERSONAL SAVING WAS LITTLE CHANGED
FROM JAN. AT A LEVEL OF $57.6 BILLION. PERSONAL TAX
AND NONTAX PAYMENTS INCREASED $0.6 BILLION IN FEB.»
COMPARED WITH A DECLINE OF $8.9 BILLION IN JAN. THE
DECLINE IN JAN. REFLECTED REFUNDS FOR OVERWITHHOLDING
DURING 1979 THAT RESULTED FROM CHANGES INTRODUCED BY THE
REVENUE ACT OF 1978.

UP

CAPACITY UTILIZATION IN MANUFACTURING AS REPORTED BY THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
REMAINED AT 84.22 OF CAPACITY IN FEB.» THE SAME AS THE
PRECEDING TWO MONTHS AND 2.5 PERCENTAGE POINTS BELOW
THE RATE A YEAR EARLIER. PRODUCERS OF INDUSTRIAL MATERIALS
OPERATED AT 86.12 OF CAPACITY LAST MONTH» DOWN 0.2
OF A PERCENTAGE POINT FROM THE RATE IN JAN. AND 1.7
PERCENTAGE POINTS FROM A YEAR EARLIER.

WITHIN MANUFACTURING» THE INCREASE IN THE OPERATING RATE
FOR ADVANCED PROCESSING INDUSTRIES WAS ACCOUNTED FOR BY
A PARTIAL REBOUND IN THE RATE FOR MOTOR VEHICLES AND
PARTS INDUSTRY. OPERATING RATES FOR MOST OTHER MANUFACTURING
INDUSTRIES EITHER DECLINED OR-CHANGED LITTLE IN FEB. THERE

D3/14/80 --

03/07/80 --

. EARNINGS ROSE 4 CENTS IN

CRS- B5 IB75041 UPDATE-03/24/B0
HERE HIDESPREA0 DECLINES IN THE UTILIzATI0N RATES EDR
PRDDUCERS DE INDUSTRIAL MATERIALS. THE RATES EDR
NDNDURABLE GDDDS MATERIALS AND ENERGY MATERIALS DECLINED
BY ABDUT 0.5 PERCENTAGE PDINT TD 90.02 AND B7.0z

RES PECT IV ELY .

INDUSTRIAL PRODUCTION EDGED UP 0.22 IN FEB.o MAINLY
REFLECTING INCREASED OUTPUT OF AUTOMOBILES» TRUCKS; AND
RELATED PARTS FROM VERY LOW JAN. LEVELS. ASIDE FROM THE
LARGE INCREASE IN MOTOR VEHICLES» PRODUCTION IN MOST
INDUSTRIES SHOWED LITTLE CHANGE OR DECLINED SOMEWHAT.
153.02 OF THE 1967 LEVEL. THE INDEX FOR FEB. IS 0.73
ABOVE A YEAR EARLIER AND EQUAL TO ITS RECENT HIGH IN
MAR. 1979. I

OUTPUT OF CONSUMER GOODS INCREASED 0.92 IN FEB.o
MAINLY TO THE RISE IN AUTO AND UTILITY VEHICLES.
WERE ASSEMBLED AT AN ANNUAL RATE OF 7.2 MILLION
UNITS -- ABOUT 19% HIGHER THAN THE JAN. RATE? BUT STILL
ABOUT 19% BELOW FEB. 1979. OUTPUT OF MATERIALS EDGED DOWN
IN FEB.v REFLECTING DECLINES IN THE PRODUCTION OF BASIC
STEEL: NONDURABLE GOODS MATERIALS AND ENERGY MATERIALS.

AT

DUE
AUTOS

THE 0vERALL EMPLDYMENT SITUATIDN IN EEBRUARY HAS LITTLE
CHANGED FROM JANUARY. HITH TDTAL EMPLDYMENT (HDUSEHDLD
SURVEY) CLDSE TD 98 MILLIDN AND AN UNEMPLDYMENT RATE DE
5.02. CDMPARED HITH THE JANUARY RATE DE 6.2% (THE
TH0-TENTHS DIEEERENCE IN THE RATE ERDM JANUARY TD
EEBRUARY IS DYERSTATED BECAUSE DE RDUNDING: THE ACTUAL
CHANGE Is NDT STATISTICALLY SIGNIPICANT). SINCE EEBRUARYA
A YEAR AG0. EMPLDYMENT HAS GRDHN BY A MDDEST 1.5 MILLIDN.
NDNEARM PAYRDLL EMPLDYMENT (ESTABLISHMENT SURVEY) RDSE
140.000 IN EEBRUARY T0 90.7 MILLIDN-—A vERY SLDH GRDHTH
PACE. I   I

JOBLESS RATES EDR MDST HDRRER CATEGDRIES SHDHED LITTLE
MDYEMENT IN EEBRUARY. ACCDRDINGLY. UNENPLDYMENT RATES
EDR ADULT MEN (4.62). ADULT HDMEN (5.72). TEENAGERS
(15.52). HHITES (5.32). AND BLACKS (11.52). HERE ABDUT
THE SAME AS IN JANUARY. IN CDNTRAST. THERE HERE JDBLESS
RATE DECLINES EDR MARRIED MEN AND WORKERS IN DURABLE GDDDS
NANUEACTURING. GRDUPS WHICH HAD EXPERIENCED SHARP INCREASES
IN JDBLESSNESS IN THE PRIDR MDNTH. THE CIVILIAN LABDR
EDRCE HAS LITTLE CHANGED ERDM JANUARY'S LEvEL AND UP 2.0
MILLIDN 0vER THE YEAR. THE CIVILIAN LABDR EDRCE
PARTICIPATIDN RATE HAS AT A HIGH DE 63.9: EDR THE LAST
THREE MDNTHS. I I

AS IN THE PRIDR MDNTH. EEBRUARY EMPLDYMENT GROWTH HAS
CDNCENTRATED IN THE SERVICE-PRODUCING SECTDR. AND THE
BIGGEST INCREASE HAS IN TRADE (UP 110.000). —EMPLOYMENT
IN THE SERVICES INDUSTRY ALS0 RDSE DYER THE MDNTH. BY 50.000.
0vER THE PAST YEAR. JOBS IN TRADE HAvE GRDHN BY 475.000
AND SERVICES BY 700.000.

BEEDRE ADJUSTMENT EDR SEASDNALITY. AVERAGE HDURLY
EEBRUARY To $6.46 AND HERE 46 CENTS
ABOVE EEBRUARY 1979. AYERAGE WEEKLY EARNINGS HERE $226.75.
UP $1.41 OVER THE MDNTH AND $14.35 0vER THE YEAR. THE
HDURLY EARNINGS INDEx HAS 242.2 (19e7=100) IN EEBRUARY.
0.32 HIGHER THAN IN JANUARY. THE INDEx HAS 3.12 ABOVE
EEBRUARY A YEAR AGO. IN DDLLARS DE CDNSTANT PURCHASING

oz/22/so ¥-

‘INDEX FOR

CRS- 7 IB75041 UPDATE-O3/24/80

POWER. THE INDEX DECREASED 5.2% DURING THE 12-MONTH PERIOD
ENDED IN JANUARY.

THE PRODUCER PRICE INDEX FOR FINISHED GOODS ADVANCED 1.52
FROM JANUARY TO FEBRUARY ON A SEASONALLY ADJUSTED BASIS.
THE INCREASE IN FEBRUARY WAS NEARLY AS LARGE AS IN JANUARY
AND MATCHED THE BIGGEST MONTHLY INCREASE IN 1979. PRICES
FOR INTERMEDIATE (SEMIFINISHED) GOODS MOVED UP 1.8%.
CONSIDERABLY LESS THAN IN JANUARY BUT MORE THAN IN ANY
MONTH LAST YEAR. AFTER FALLING IN JANUARY. THE CRUDE
MATERIALS PRICE INDEX ROSE 2.62. ‘

AMONG FINISHED GOODS. PRICES FOR ENERGY GOODS CLIMBED
7.52. CONSIDERABLY MORE THAN IN ANY MONTH SINCE MARCH 1974.
CONSUMER FOOD PRICES FELL SLIGHTLY FOR THE SECOND
CONSECUTIVE MONTH. AFTER RISING AT AN 8.32 RATE DURING
THE FOURTH QUARTER OF 1979.

BEFORE SEASONAL ADJUSTMENT. THE PRODUCER PRICE INDEX
FOR FINISHED GOODS ROSE 1.42 TO 235.4 (I967=100). OVER
THE YEAR. THE FINISHED GOODS PRICE INDEX MOVED UP 13.3%.
THE INDEX FOR FINISHED ENERGY GOODS CLIMBED 75.82 FROM
FEBRUARY 1979 TO FEBRUARY 1980. PRICES FOR INTERMEDIATE
GOODS INCREASED 18.6% OVER THE YEAR. AND THE PRODUCER
PRICE INDEX FOR CRUDE MATERIALS WAS 14.02 HIGHER THAN
FEBRUARY 1979.

IN

THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS

{CPI-U) ROSE 1.42 BEFORE SEASONAL ADJUSTMENT IN

JANUARY TO 233.2 (1967=100). THE CONSUMER PRICE

URBAN WAGE EARNERS AND CLERICAL WORKERS
‘CPI-W) ALSO INCREASED 1.42 BEFORE SEASONAL ADJUSTMENT
IN JANUARY TO 233.3 (1967=100). THE CPI-U WAS 13.9%
HIGHER AND THE CPI-W WAS 14.02 HIGHER THAN IN JAN. 1979.

ON A SEASONALLY ADJUSTED BASIS. THE CPI-U ROSE

1.42 IN JANUARY. AFTER AN INCREASE OF 1.22 IN DECEMBER
AND AN AVERAGE MONTHLY INCREASE OF SLIGHTLY MORE THAN
1.02 DURING 1979. ALL MAJOR COMPONENTS OF THE CPI.
EXCEPT FOR FOOD. ADVANCED SHARPLY IN JANUARY. THE‘
LARGEST INCREASE WAS THE 1.7% RISE IN THE TRANSPORTATION
COMPONENT. PRIMARILY DUE TO A 7.4% INCREASE IN GASOLINE
PRICES. THE HOUSING COMPONENT ROSE 1.4%. REFLECTING
HIGHER HOUSEHOLD FUEL AND HOMEOWNERSHIP PRICES.

THE 0.1% INCREASE IN THE JANUARY INDEX FOR FOOD AND
BEVERAGES WAS THE SMALLEST SINCE LAST AUGUST.

THE MEDICAL CARE INDEX ROSE 1.33 IN JANUARY. FOLLOWING
A 1.12 INCREASE IN DECEMBER. THE INDEX FOR APPAREL

AND UPKEEP ROSE 0.92. SLIGHTLY MORE THAN THE DECEMBER
RISE. WHILE THE INDEX FOR ENTERTAINMENT ROSE

1.02 IN JANUARY. FOLLOWING AN AVERAGE MONTHLY INCREASE
OF 0.6% DURING 1979. THE INDEX FOR OTHER GOODS AND
SERVICES ROSE 1.12 IN JANUARY. DUE LARGELY TO A 2.62
INCREASE IN CIGARETTE PRICES. THE CHANGES IN THE
CONSUMER PRICE INDEX FOR URBAN WAGE EARNERS AND CLERICAL
WORKERS WERE NEARLY IDENTICAL TO THE MOVEMENTS OF THE
CPI-U. ;

CRS- 8 IB75041 UPDATE-O3/2+/30

 

A

BOARD OF GOVERNORS OE THE FEDERAL REsERvE SYSTEM. GENERAL SUMMARY:
IN. INDUSTRIAL PRODUCTION: 1971 EDITION. WASHINGTON. OCT. 1972.
Pa  0

SAMUELSONo PAUL A. NATIONAL INCOME AND PRODUCT. (CHAPTER 10) IN 9
ECONOMICS. 9TH EDITION. MCGRAH-HILL» 1973. P. 179-204.

U.S. DEPT. OF COMMERCE. BUREAU OF ECONOMIC ANALYSIS. THE
NATIONAL INCOME AND PRODUCT ACCOUNTS OF THE UNITED STATES:
REVISED ESTIMATES 1929-74. SURVEY OF CURRENT BUSINESS.

V. 56 NO. 1 PARTS I 8 II. JAN. 1976.
PART 19 ARTICLE PART II. TABLES

U.S. DEPT. OF LABOR. BUREAU OF LABOR STATISTICS. THE
‘ CONSUMER PRICE INDEX REVISION-1978: FACTS ABOUT THE
REVISED CONSUMER PRICE INDEX. 1978. 7 P. A

--- THE CONSUMER PRICE INDEX: CONCEPTS AND CONTENT OVER THE YEARS.
REPORT NO. 517. MAY 1978. 27 P.

_———— NEWS. "BRIEF EXPLANATION OF PRODUCER PRICE INDEXES".

U.S. LIBRARY OF CONGRESS. CONGRESSIONAL RESEARCH SERVICE.
A CONSUMER PRICE INDEX FOR THE ELDERLY. BY VALERIE
LOWE AMERKHAIL. WASHINGTON. NOV. To 1975. 14 P.
TYPED REPORT.

WALLACE. WILLIAM H.  MEASURING PRICE CHANGES (THE DESIGN AND CONSTRUCTION
OF PRICE INDEXES) FEDERAL RESERVE BANK OF RICHMOND MONTHLY REVIEW.

OCT. 1970: 2-11.

---- MEASURING PRICE CHANGES (REVIEW OF THE MAJOR PRICE INDEXES) FEDERAL
RESERVE BANK OF RICHMOND MONTHLY REVIEW. NOV. 1970: 2-7.

UBRARY
or:
WASHINGTON
UNNERSITY
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