SCB_101979

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

OCTOBER 1979 / VOLUME 59 NUMBER 10SURVEY OF CURRENT BUSINESS

CONTENTS

THE BUSINESS SITUATION 1

National Income and Product Tables 10

Second-Quarter Deceleration inState Personal Income 19

Total Personal Income, States and Regions 20Motor Vehicles, Model Year 1979 21

The National Income and Product Accountsof the United States, An Overview 25

A Money Market Model With the FederalFund Rate as the Endogenous Monetary

Policy Variable 35

CURRENT BUSINESS STATISTICS

General SI

Industry S22

Footnotes S37

Subject Index (Inside Back Cover)

U.S. Department of CommerceJuanita M. Kreps / SecretaryCourtenay M. Slater / Chief Economist

for the Department of Commerce

Bureau of Economic AnalysisGeorge Jaszi / DirectorAllan H. Young / Deputy.DirectorCarol S. Carson / Editor-in-Chief,

Survey of Current Business

Manuscript Editor: Dannelet A. GrosvenorManaging Editor: Patti A. Trujillo

Staff Contributions to This Issue: Robert B. Bretz-felder, Robert L. Brown, Carol S. Carson, Edwin J .Coleman, Douglas R. Fox, Howard L. Fr iedenberg,George Jaszi, Eric R. Johnson , Robert M. Lipovsky,Virginia K. Olin, Russell Sheldon.

SURVEY OF CURRENT BUSINESS. Published monthly bythe Bureau of Economic Analysis of the U.S. Departmentof Commerce, Editorial correspondence should be ad-dressed to the Editor-in-Chief, Survey of Current Busi-ness, Bureau of Economic Analysis, U.S. Department ofCommerce, Washington, D.C. 20230.

First-class mail.Domestic only: Annual subscription$35.00.

Second-class mail.Annual subscription: $22.00 domes-tic; $27.50 foreign. Single copy: $1.90 domestic; $2.40foreign.

Foreign air mail rates available upon request.Mail subscription orders and address changes to the Su-

perintendent of Documents, U.S. Government Printing Of-fice, Washington, D.C. 20402. Make checks payable toSuperintendent of Documents.

Second-class postage paid at Washington, D.C. and atadditional mailing offices.

The Secretary of Commerce has determined that the publication of this periodical is necessary in the transaction of the public business required by law of this Department. Use of funds forprinting this periodical has been approved by the Director of the Office of Management and Budget through September 1,1980.

U.S. DEPARTMENT OF COMMERCE DISTRICT OFFICES

ALA., Birmingham 35205908 S. 20th St. 254-1331ALASKA, Anchorage 99501632 6th Ave. 265-5307ARIZ., Phoenix 85073201 N. Central Ave. 261-3285CALIF., Los Angeles 9004911777 San Vicente Blvd. 82-1-7591CALIF., San Francisco 94102450 Golden Gate Ave. 556-5868COLO., Denver 8020219th & Stout St. 837-3246CONN., Hartford 06103450 Main St. 244-3530FLA., Miami 3313025 West Flagler St. 350-5267GA., Atlanta 303091365 Peachtree St., N.E. 881-7000

GA., Savannah 31402222 U.S. Courthouse & P.O. Bldg.232-4321

HAWAII, Honolulu 96850300 Ala Moana Blvd. 546-8694

ILL., Chicago 60603Rm. 1406 Mid Continental Plaza Bldg.353-4450

IND., Indianapolis 4620446 East Ohio St. 269-6214IOWA, Des Moines 50309210 Walnut St. 284-4222LA., New Orleans 70130

MICH., Detroit 48226445 Federal Bldg. 226-3650MINN., Minneapolis 55401218 Federal Bldg. 725-2133MO., St. Louis 63105120 S. Central 425-3302NEBR., Omaha 681021815 Capitol Ave. 221-3665\EV., Reno 89503777 W. 2d St. 784-5203N.J., Newark 071024th Floor Gateway Bldg. 6-45-6214N. MEX., Albuquerque 87102

432 International Trade Mart 589-6546 505 Marquette Ave, N.W. 766-2386

MD., Baltimore 21202415 U.S. Customhouse 962-3560MASS., Boston 02116441 Stuart St. 223-2312

\.Y. , Buffalo 11202111 W. Huron St. 816-1191N.Y., New York 1000726 Federal Plaza 261-0631

N.C., Greensboro 27402203 Federal Bldg. 378-5345OHIO, Cincinnati 45202550 Main St. 684-2944OHIO, Cleveland 41114666 Euclid Ave. 522-4750OREG., Portland 972041220 S.W. 3rd Ave. 221-3001PA., Philadelphia 19106600 Arch St. 597-2850PA., Pittsburgh 152221000 Liberty Ave. 644-2850P.R., San Juan 00918659 Federal Ride. 753-4555S.C., Columbia 292042611 Forest Dr. 765-5345TENN., Memphis 38103147 Jefferson Avo. 521-3213

TEX., Dallas 752421100 Commerce St. 749-1515TEX., Houston 77002515 Rusk St. 226-4231

UTAH, Salt Lake City 84138125 South State St. 524-5116

VA., Richmond 232408010 Federal Bldg. 782-2246

WASH., Seattle 98109Km. 706 Lake 1'nion Bldg. 442-5615

W. VA., Charleston 25301500 Quarrier St. 313-6181WIS., Milwaukee 53202517 K. Wisconsin Ave. 291-3173

WYO., Cheyenne 820012120 Capitol A*e. 778-2220


the BUSINESS SITUATION

R.LEAL GNP increased 2% percent atan annual rate in the third quarter,after a decline of the same size in thesecond (table I).1 The swing was in finalsales. It was partly offset by inventoryinvestment, which dampened the third-quarter increase and the second quarterdecline in GNP (chart 1). As can beseen from table 2, the second-quarterdecline in final sales was concentratedin motor vehicles. In the third quarter,when final sales of motor vehicles in-creased little, the increase in final salesother than motor vehicles was in per-sonal consumption expenditures (PCE)and net exports.

Prices.As measured by the im-plicit price deflator, the increase in GNPprices decelerated from 9% percent atan annual rate in the second quarter to8% percent in the third. In addition tochanges in the prices of the goods andservices that make up GNP, the im-plicit price deflator reflects shifts in thecomposition of these goods and services.Its deceleration in the third quarter istraceable mainly to the change in

1. The third-quarter (.JNP estimates arc based on the fol-lowing major data sources: For personal consumption expendi-tures (PCE), retail sales, and unit auto and truck salesthrough September: for nonresidentiat fired investment, thesame information for autos and trucks as for PCE, manu-facturers' shipments of machinery and equipment for Julyand August, July and August construction put in place, andinvestment plans for the quarter: for residential investment,July and August construction put in place, and housing startsfor July and August: for change in business inventories, Julyand August book values for manufacturing and trade, andunit auto inventories through September: for net exports ofgoods and services, July and August merchandise trade, andfragmentary information on investment income for the quar-ter: for government purchases of goods and services, Federal uni-fied budget outlays for July and August, State and local con-struction put in place for July and August, and State andlocal employment through September; and for GNP prices,the Consumer Price Index for July and August, the ProducerPrice index through September, and unit value indexes forexports and imports for July and August. Some of thesesource data are subject to revision.

business inventories component ofGNP. The real change in several typesof inventories that are high-priced (inthe sense that their prices have in-creased relatively more, compared withthe valuation year 1972, than did theaverage of other GNP prices) was largerin the second quarter than in the third.The fixed-weighted price index, whichdoes not reflect compositional shifts,increased 9% percent in both quarters(table 3).

The fixed-weighted price index forPCE increased 11% percent at an annualrate in the third quarter, compared with10/2 percent in the second. As shown inchart 2, food prices decelerated, andprices of energy and of other PCE ac-celerated. The acceleration in otherPCE prices was mainly in services,where it was widespread.

Prices of PCE for energy increased66 percent at an annual rate, comparedwith 53% percent in the second quarterand 19/2 percent in the first. Gasolineprices increased about 75 percent inboth the second and third quarters,compared with about 25 percent in thefirst. Fuel oil prices continued to ac-celerate, from about 25 percent in thefirst quarter and 80 percent in thesecond to 120 percent in the third.Sharp increases in the prices of crudeoil were a major factor in the accelera-tions. Effective April 1, OPEC raisedprices 9 percenton top of a 5-percentincrease effective January 1and au-thorized its members to add surchargeson their own initiative. A further in-crease 'of 16 percent was generallyeffective July 1. Tight crude oil supplies,due to disruption in Iran's productionearlier in the year and cutbacks in othercountries, provided a favorable settingfor the imposition of surcharges and for

CHART 1

Real Product:Change From Preceding Quarter

Billion (1972) $

IIIIII- i20

10

Q

-10

CHANGE

~ lH

IN

1 |

BUSINESS

I

INVENTORIES

-

._:

30

20

10

0

-10

20

10

0

-10

PERSONAL CONSUMPTION EXPENDITURES

- M i l l FIXED INVESTMENT

ResidentialxI

1977 1978 1979

Based on Seasonally Adjusted Annual Rates

U.S. D e p a r t m e n t of C o m m e r c e . Bureau of Economic Analysis 7!


SURVEY OF CURRENT BUSINESS October 1979

price increases by non-OPEC countries.Mexico, for example, increased theprice charged for its exported crudeoil by 32 percent ellective July 1. Gaso-line prices were affected, in addition, bythe shortage in the second quarter, andGovernment controls and regulations,some of them designed to improve theallocation of gasoline supplies amongregions. Prices of fuel oil are not subjectto Federal controls, and reflected tightsupplies throughout the period. Thephased decontrol of domestic crude oilprices, which began June 1, has not yet

had a major influence on consumerenergy prices.

Natural gas price increases, at annualrates, accelerated from 9 percent inthe first quarter and 16 percent in thesecond to 30 percent in the third. Elec-tricity prices increased about 27 percentin the third quarter, up from about 20percent in the second and 5 percent inthe first. Crude oil and natural gas areimportant costs in generating electric-ity; increases in their price were trans-mitted to consumers via fuel adjustmentclauses.

Table 1.Gross National Product in Current and Constant Dollars

Gross national product

Final sales..Change in business inven-

tories

Less: Rest-of-the-world prod-uct

Equals: Gross domestic prod-uct

Current dollars Constant (1972) dollars

Billions of dollars, seasonally adjusted at annual rates

1978

I V

2,235.2

2,214. 5

20. (')

21.2

2,213.9

1979

I

2,292.1

2,272. 9

19.1

24.2

2,207.9

n

2,329.8

2,290. 4

33. 1

23.7

2,30(>. 1

HI

2,391.5

2,371. 5

20.0

24.2

2,367. 3

1978

IV

1,426.6

1,414. (i12.0

8.1

1,418.4

1979

I

1,430.6

1,418.4

12.3

8.9

1,421. 7

II

1,422.3

1,404.1

18.1

8.1

1,414.2

III

1,403.8

1,420. 8

10.0

7.1

1,423. 7

Percent change frompreceding quarter at

annual rates

1979

T

1.1

1.1

44.3

.9

IT

- 2 . 3

- 3 . 9

-32. 5

- 2 . 1

in

2.4

4.8

-40. 0

2.7

Table 2.Key Factors in Real GNP

GNP... .-Less: Motor vehicles

GNP less motor vehicles.

Final salesLess: Motor vehiclesFinal sales less motor vehicles .

PCE . .-Less: Motor vehiclesPCE less motor vehiclesLess: EnergyPCE less motor vehicles and energy-.

Nonresidential construction

Producers' durable equipmentLess: Motor vehiclesProducers' durable equipment less motor vehicles.

Residential investment ... . .Net exports . . . . . .Less: Motor vehicles..Net exports less motor vehicles-

Government purchases ..Less: Motor vehiclesGovernment purchases less motor vehicles-

Change in business inventories . .Less: Motor vehiclesChange in business inventories less motor vehicles..

Change from preceding iquarter (billions of Percent change from

constant (1972) dollars; previous quarter atbased on seasonally ! annual rates

adjusted annual rates) ,

1979:111T

1979:11 1979:111

8.5

- 7 . 2

15.8

Ki.7

IG!O

9.8- . 19.9

.49. 5

. ()

.(>

.9- . 3

. 7

(. 200.3

.20.2

- 8 . 17 9- . 2

- 2 . 3

-40 . 0

.6

- 3 . 9-41 .8- 1 . 1

- 2 . 9-39 . 7

- . 1-20 . 7

2.1

19.0

- 8 . 9-40. 1

9.8

- 7 . 2

- 3 . 3-17 .2- 3 . 2

2.4

-32 . 0

4.8

4.83. 94. 9

4.3- 1 . 1

4.03.04.8

5. 7

2.010. 0

- 1 . 3

- 4 . 7

.2- 3 . 0

.2

Food prices increased 3} percentat an annual rate in the third quarter,down from 6%-percent and 17%-percentincreases in the second and first quar-ters, respectively. The major factor inin the third-quarter deceleration was adecline in prices of meat, poultry, andeggs. Pork and poultry prices reflectedrecord or near-record production. Con-sumer substitution of them for beefcontributed to a decline in beef prices.

Prices paid by investors and govern-ment in the third quarter continued toincrease in a range close to 10 percent.

Employment and unemployment.Thecivilian labor force increased 900,000after declining 180,000 in the secondquarter (table 4). The changes in em-

CHART 2

Fixed-Weighted Price Index:Change From Preceding Quarter

Percent20

^ 7

10

60

50

40

30

20

10

-10

I I l I l I I I l i i I l I I

PERSONAL CONSUMPTION EXPENDITURES

i i i l l I I l i l I l I I1976 1977 1978 1979

Seasonally Adjusted at Annual Rates

U.S. Department of Commerce. Bureau of Economic Analysis


October 1979 SURVEY OF CURRENT BUSINESS

Table 3.Fixed-Weighted Price Indexes

Index numbers (1972 = 100) seasonally adjusted

1978

TIT IV

1979

III

Percent change fron preceding quarter at annual rates

1978

III IV Ii

1979

i n

Gross national productLess: Change in business inventories-

Equals: Final sales

149.1 152.6 ! 155.7 159.0 162.8 166.6 170.4 9.6 8.3 8.9

Less: ExportsPlus: Imports

Equals: Final sales less exports plus imports

Personal consumption expendituresFoodEnergy lOther personal consumption expenditures

OtherNonresidential structuresProducers' durable equipment.ResidentialGovernment purchases

FederalState and local.

149.1184. 9210.2150.8147.1155.6186.8140. 9

157.1163.0150. 7169. 3155.0

152.1157.0

152.5 I189.6 !215.3 !154.3 j150.5162.2190.4143.4

160. 7167. 9153.5176.7157. 7154.1160.2

155.6192. 9217.4157.3153.1165.2194.5145.8

164.3172. 9156. 4182. 9160.6

156.1163.7

158.9199.2222.1160.5155. 9168.8198.8148.2

168.4177.7158.4189.5164.5160.8167.0

162.7

205.3229. 6164.4

160.0175.8207. 9151.0

171. 9181.6161.5192. 7168.2

164.0171.1

166.4211.4240. 9168.5

163.9178.5231.4153.5176.2186.4165.6199.3172.0

167.2175.2

170.3219. 9257.1172.8

168.4179. 9262.5156.3180.4191. 7169. 0205.4175.7

170.2179.4

9.610.610.09.5

9.618.28.17.2

9.412.47.4

18.67.1

5.28.4

8.36.94.08.0

7.27.68.8

9.312.57.7

15. 07.65.39.1

8.813.89.18.57.49.09.1

10.211.65.7

15.110.0

12.88.2

9.9

9.912.914.110.1

11.017.619.57.98.79.17.67.09.4

8.210.1

9.5

9.512.421.210.3

10.36.3

53.5

10.410.910.514.3 9 . 2

7.910.0

9.6

9.617.129.810.8

11.43.3

65.87.69.9

11.98.7

13.09.0

7.610.0

1. Gasoline and oil, fuel oil and coal, electricity, and gas.

ployment were very similar to those inthe labor force, and unemployment in-creased only 115,000. The unemploy-ment rate was 5.8 percent, up 0.1 per-centage points from the second quarter.The increase was confined to adult men,and was the first increase for that groupsince the fourth quarter of 1976.

Changes in employment as measuredby the establishment survey differedsubstantially from those shown by thehousehold survey. According to theestablishment survey, employment wasup 630,000 in the second quarter andonly 410,000 in the third. In both quar-ters, the largest increases were in theservice-producing industries. Employ-ment in the goods-producing industrieshas changed little since the first quarter.Average weekly hours were up 0.1 afterdeclining 0.3 in the second quarter. Theswing in manufacturing hours was morepronouncedan increase of 0.3 hoursafter a decline of 0.8. Second-quarterhours had been reduced by severalspecial factors, including strikes and theunusual timing of religious holidays.

Costs and productivity.The increasein real output of the business economyother than farm and housing was onlyfractionally larger than the increase inhours, and productivity increased onlyslightlyy2 pecent at an annual rate(table 5). This increase followed sub-stantial declines3^-4^ percentear-lier in the year. Estimates of quarterlychanges in productivity are subject to

large margins of error. It is particularlydifficult to interpret the estimates for1979.

Compensation per hour increased S}ipercent, compared with 8 percent in thesecond quarter and !0}i percent inthe first. The first-quarter increase in-cluded about 2 percentage points at-tributable to increases in the minimumwage and employer contributions forsocial insurance. Excluding these special

factors, the increase in compensationper hour has been in the range of 8-8)2percent over the past year Unit laborcosts increased 8 percent in the thirdquarter, substantially less than in thesecond and first quarters and about thesame as in the fourth quarter of 1978.Personal income and its disposition

Personal income increased $51 billionin the third quarter, compared with $40

Table 4.Selected Labor Market Indicators[Seasonally adjusted]

Household surveyCivilian labor force (millions)

EmploymentUnemployment

Unemployment rate (percent):TotalAdult menAdult womenTeenagers

Employment-population ratioCivilian labor force participation rate

(percent)Establishment survey

Employment, nonfarm payroll (mil-lions)

Goods producingManufacturingOther

Distributive 1Services 2Government

Average weekly hours, private non-farm:

TotalManufacturing

19

III

100.894. 7G.O

0.04.10.1

10.158.7

03. 3

80.925.720.55.2

24.521.115. 5

35.840.5

78

IV

101. 595. 05.9

5.84.05.8

10.3

59. 0

03.5

87.8

20.120.85.3

24.821.415. 5

35.840.0

I

102. 590. 05.9

5. 74. 05. 7

15.859. 4

03.8

88.7

20. 521.05.5

25.121.015.5

35.840.0

1979

I I

102.390. 45.9

5. 73.95.7

10.259.1

03. 5

89.4

20. 021.15.0

25.221.915.0

35. 539.8

III

103. 297.20.0

5.84.25.0

10.1

59. 3

03. 8

89.820. 021.05.0

25.322.215.0

135.0 140.1

1978:111-1978:1V

0.8.9

- . 1

- . 2- . 1- . 3

.2

.3

.2

1978:IV-1979:1

110

_

0

-

0

00

00

1

15

4

3

9

431

33

1979:1-1979:11

- 0 . 2

0

0

0

- .

- .

0

.

2

1

4

3

3

0

1

1

131

38

1979:11-1979:111

0.9.8

1311

. 2

.4

0- . 1

.1

.1

.3

.1

.3

1. Transportation and public utilities, and wholesale and retail trade.2. Services, and finance, insurance, and real estate.


SURVEY OF CURRENT BUSINESS October 1979

billion in the second (table 6).2 Wageand salary disbursements increased$24% billion, only a little more than inthe second quarter. In commodity-pro-ducing1 industries, the increase in thethird quarter was smaller than in thesecond. The deceleration was mainly inconstruction. Increases in the dis-

Table 8.Personal Income and Its Disposition

2. Quarterly estimates of the national income and productaccounts are expressed at seasonally adjusted annual rates,and quarterly changes in them are differences between theserates.

Table 5.Real Gross Product, Hours, andCompensation in the Business EconomyOther Than Farm and Housing[Percent change from preceding quarter at annual rates

based on seasonally adjusted estimates]

Real gross productHoursCompensation

Real gross product per hoar.Compensation per hourUnit labor cost

Table 6.Personal Income: Change fromPreceding Quarter

[Billions of dollars; based on seasonally adjustedannual rates]

Personal income

Wage and salary disbursementsManufacturingOther commodity-producingDistributiveServicesGovernment and government en-

terprisesProprietors' income

FarmNonfarm

Transfer paymentsOther incomeLess: Contributions for social in-

surance

1979:TT

39.923.1

3.75. 04.75.74.1

.3i

0. 311.2

1.1

1979:1 IT

50.924.7

3.13.08.08.1

2.5

- 4 . 13.4

17.4

10.7

1.3

Table 7.Personal Tax and Nontax Pay-ments

[ Change from preceding quarter: billions of dollars, basedon seasonally adjusted annual rates]

Personal tax and nontax pay-ments _ _

Federal _ _

Impact of legislationOther

State and local

Impact of legislation... _

Other

1978

I V

12.2

10.0

0

10.0

2.2

0

2.2

1979

I

2.2

2.1

-12.915.0

.1

- 1 . 7

1.8

I I

10.3

10.4

.0

11.0

- . 1

- 1 . 7

1.7

111

15.711.0

0

11. 0

4.1

2.4

1.7

Personal income

Less: Personal tax and nontax paymentsDisposable personal income.. .Less: Personal outlays

Personal saving .

Real disposable personal income

Personal saving rate

1978

IV

1979

I 11 III

Seasonally adjusted at annualrates

Change from precedingquarter

1979

I II I I I

Based on seasonallyadjusted annual rates

Billions of dollars

1,803.1278.2

1,524.81,453. 4

71.5

1,852.6

280. 4

1,572.21, 493. 0

79.2

1,892.5290. 7

1, (iOl. 71,515. 8

85.9

1,943.4

306. 41, (530. 91,570.0

66.9

Billions of 1972 dollars

991. 5 990. (5 993. 0 990. 3

49.52.2

47.4

39. 07.7

39.9

10.3

29. 522.8

6.7

50.9

15.735. 254. 2

-19 .0

Percent (seasonallyadjusted at annual rates)

2.1 - 1 . 4 - 1 . 1

Percent (based on seasonally adjusted annual rates)

4.7 5.0 5.4 4.1 . 3 .4 - 1 . 3

Table 9.Personal Consumption Expenditures in Current and Constant Dollars

Personal consumption ex-penditures.

DurablesMotor vehicles and

parts . . .Other durables .

NondurablesFoodEnergy _ .Other nondurables

ServicesEnergy 2Other services

Current dollars Constant (1972) dollars

Billions of dollars, seasonally adjusted at annual rates

1978

IV

1, 415. 4212.1

94. 9117.2

558.1283. 9

68.0205.7

045.143.4

001. 7

I

1,454.2213. 8

97.7110.1571.1292. 973.8204.4

009. 347.7

021. 0

1979

II

1,475.9208.789.1

119. 0

581. 2290. 777. 5207.1080. 047.3

038. 7

III

1,528.6213. 7

89. 8123. 9002. 5302. 0

90.720!). 8712.450.8

001. 7

1978

IV

920.3

152.1

03. 788.4

351. 9108. 034. 3

149. 0410. 323.2

393. 1

1979

I

921.8

150. 204.080. 2

348.1107. 234. 0

140. 2423.525.2

398. 4

II

915.0

144.8

57. 1S7.7

344.1160. 731. 5Ho. 9420. 123.8

402. 3

III

924.8147.0

57.189. 9

340. 0108. 331.7

140. 0431. 224.0

407. 1

Percent change frompreceding quarter atannual rates

I

0.6- 5 . 0

1.0- 9 . 0- 4 . 2- 3 . 3

3.8- 7 . 1

7.137. 05.4

1979

I I

- 2 . 9

-13 .0- 3 0 5

7. 1

- 4 . 5- 1 . 2

- 3 1 . 0- . 82.5

- 1 9 . 34.0

III

4.3

0.2

.310.1

2. 93.92.01.94.93.44.9

1. Gasoline and oil, and fuel oil and coal.2. Electricity and gas.

Table 10.Fixed Investment in

Fixed investment

Nonresidential _Structures

Producers' durableequipmentAutos, trucks and

busesOther

Residential

Current dollars

1978

IV

349.8

230.1

84.4

151.841.8

109. 9

113.7

Millions of dollars

I

354.6243.4

84. 9

158. 542.7

115.8111.2

1979

II

361.9249.190.5

158. 038.1

120.5112. 9

Current and Constant Dollars

Constant (1972)

, seasonally adjusted at annual rates

iIII

372.1

257. 294. 0

162. 040.5

122.1

114.9

1978

IV

205.5

145. 540. 5

98. 928.270.700.0

I

204.9147.2

45.8

101.3

28.472. 957.7

1979

II

203.5

140. 947. 9

99. 024.474.050. 7

III

1204.2

148.248.5

99. 625.374.4

50.0

dollars


1

- 1 . 0

4.8

- 5 . 6

10.13.3

12.8- 1 4 . 3

1979

II

- 2 . 7

- . 8

19.0

- 8 . 9-40 . 1

9.8- 7 . 2

III

1.2

3. 05. 7

2.0

10.0- 1 . 5- 4 . 7


October 1979 SURVEY OF CURRENT BUSINESS

tributive and services industries werelarger than in the second quarter.Transportation, where strikes helddown the second-quarter increase, con-tributed to this step-up.

The largest differences between thesecond- and third-quarter changes inthe components of personal income werein the income of farm proprietors andin transfer payments. Farm proprietors'income declined $4 billion in the thirdquarter, after a fractional decline in thesecond. The major factor in the largerdecline was a swing in cash receipts.Cash receipts from crops increasedmuch less in the third quarter than inthe second; an acceleration in priceswas more than offset by a swing in thevolume of marketings. Cash receiptsfrom livestock declined for the secondquarter, largely due to declines inprices.

Transfer payments increased $17%billion, compared with $6% billion inthe second quarter. The accelerationwas more than accounted for by cost-of-living increases in benefits paid underseveral Federal programs. These in-creases, most of which were effectiveJuly 1, added $U}i billion to third-quarter transfer payments; $9% billionwas accounted for by the 9.9-percentincrease in social security benefits.

Personal taxes, which are deductedfrom personal income in deriving dis-posable personal income, increased$15% billion in the third quarter, com-pared with $10% billion in the second(table 7). Most of the acceleration wasin State and local taxes. In the secondquarter, these taxes had not changed astax reductions in New York and Cali-fornia ofl'set growth in the State andlocal tax base.

In the third quarter, disposablepersonal incomethe income availablefor spending and savingincreasedabout $35 billion and personal outlays$54 billion (table 8). In the secondquarter, income had increased $29%billion and personal outlays $23 billion.Reflecting- these changes, the personalsaving rate, which had been 5.0 percentin the first quarter, increased to 5.4percent in the second and dropped to4.1 percent in the third.

A 4.1-percent personal saving ratewas approached only three other times

CHART 3

Housing StartsMillions of units2.5

1.0

Multifamily

I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I1975 1976 1977 1978

Seasonally Adjusted at Annual Rates1979

U.S. Department of Commerce. Bureau of Economic Analysis

in the last 25 years. As always, it isdifficult to explain the saving rate andchanges in it. Two specific changes thatled to reductions of disposable incomein the third quarter work in the direc-tion of explaining the third-quarterdrop in the saving rate. These are the$4 billion reduction in farm proprietors'income and the $4 billion swing inState and local taxes due to legislativechanges. The effect on the saving rateof the third-quarter cost-of-living in-creases in Federal benefits is harder

Data: Census79-10-3

to assess. Little is known about thepattern of spending out of this kindof income incrementone-time, re-ceived by retirees, and expected be-cause legislated. Moreover, becausestatistically, personal saving is thedifference between disposable personalincome and personal outlays, the savingrate depends on the adjustment ofincome and outlays for seasonality.The cost-of-living increases in benefitsare not seasonally adjusted; in contrast,outlays made out of them are adjusted,

Table 11.Net

Net exports of goods andservices

Exports

MerchandiseAgriculturalNonagricultural

Other

Imports _.

Merchandise .Petroleum .Nonpctrolcuin

Other .

Exports of Goods and Services in Current and Constant ]Current dollars

Billions of dollars,

1978

IV

- 4 . 5

224. 9

154. 531.3

123. 2

70.4

229.4

183.143. 2

139. 9

46.3

I

4.0

238. 5

163. 030. 6

132. 4

75. 5

234.4

186.046.6

139. 5

48.4

1979

I I

- 8 . 1

243. 7

166.830. 9

135. 9

76.9

251. 9

200.451.6

148.8

51.4

Constant (1972)

seasonally adjusted at annual rates

I I I

- 5 . 3

266.4

186.038.4

147.6

80.3

271.7

217.866.0

151.8

53. 9

1978

IV

12.9

113.8

78.915. 563.4

34.9

101.0

76.68.6

67.9

24.4

I

17.0

117.0

80.814.466.4

36.2

100.0

75.18.8

66.3

24. 9

1979

I I

13.2

116.0

80. 514.366. 2

35.6

102. 9

77.28.4

68.8

25. 7

III

19.4

122.5

87.416.670.7

35.1

103.1

77.18.4

68.7

26.0

dollars

Dollars


I

11.510.1

-24.820.2

14.8

-3 .8

-7 .69.8

- 9 . 6

8.7

1979

I I

- 3 . 1

- 1 . 7- 2 . 8- 1 . 4

- 6 . 3

12.1

11.8-17.4

16.2

12.9

III

24.1

39.183.930.6

- 5 . 3

1.0

- . 6- 1 . 3. 5

5. 9


6 SUEVEY OF CURRENT BUSINESS October 1979

CHART 4

Selected Interest RatesPercent14

12

SHORT TERM

6-month Treasury bills

A I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I

12MORTGAGES FOR NEW HOUSES

Conventional Loans l I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I

1 9 7 5 1 9 7 6* A t the end of the month.U.S. Department of Commerce. Bureau of Economic Analysis

1977 1978 1979Data: FRB. FHLBB

7910-4

Table 12.Government Purchases of Goods and Services in Current and Constant Dollars

Government purchases ofgoods and services..

Federal _

National defense -Nondefense

State and local

Current dollars

Billions of dollars,

1978

IV

453.8

159. 0

101. 257.8

294. 8

I

460.1

1(53.103. 400.2

290. 5

1979

I I

466.6

101. 7

100. 055. 7

301. 9

Constant (1972)

seasonally adjusted at annual rates

I I I

476.2

1G2. 5

108 554.0

313. 7

1978

IV

276.0

99. 3

170. 0

I

274.7

101.1

173. 0

1979

II

272.4

98.1

171.3

I I I

272.6

97. 0

175.0

dollars


I

- 1 . 8

7.2

- 0 . 0

1979

I I

- 3 . 3

- 1 1 . 3

1.0

I I I

0.2

- 2 . 0

1.5

but perhaps not fully. The large andabrupt changes that occurred in PCEfor motor vehicles in the second quarterand in PCE for energy in the second andthird quarters probably also affectedchanges in the saving rate.

Inflation gives rise to more generaldifficulties in the explanation of con-sumer spending and saving. In theshortrun, consumers try to maintainliving standards and reduce saving tohelp them to do so. In the longrun, theyreduce spending in line with reductionsin real income. Moreover, spending andsaving behavior is likely to depend onthe rate of inflation and changes in it. Itis not possible to sort out the relativeimportance of these factors in thepresent situation. Also, capital gainsand losses, which are not includedin personal income, become larger andmore volatile under inflation, and moreimportant relative to personal income asa source of consumer spending. Becauselittle is known about the size and com-position of capital gains and losses andabout the way they influence consumerspending, their presence complicates theexplanation of the saving rate. If ex-pectations are taken into account, theexplanation of consumer spending andsaving is further complicated. Con-sumers may step up current spending,especially for durable items, in order tobeat prospective price increases. Alter-natively, because inflation creates un-certainty and /or erodes the purchasingpower of savings, they may step upsaving to compensate for this effect.

Real PCE increased 4% percent atan annual rate in the third quarter,after a decline of 3 percent in the second(table 9). The decline in the secondquarter was more than accounted forby PCE for motor vehicles and forenergy. The sharp decline in motorvehicles partly reflected concern overthe price and availability of gasoline.This concern is suggested by the shift-in the composition of new car salestoward domestic small cars and imports.In the third quarter, PCE for motorvehicles was flat, and there was a shift-in composition back toward large cars.Although incentive and cash rebateprograms complicate the analysis of the


October 1979 SUEVEY OF CURRENT BUSINESS

situation, this pattern strongly suggeststhat the concern over gasoline lessened.(For a detailed discussion of unit autoand truck sales and production, see thearticle on "Motor Vehicles, Model Year1979" later in this issue.) PCE forenergy increased moderately in thethird quarter. Its second-quarter de-cline was traceable not only to thegasoline shortage, but also to a reduc-tion from unusually high first-quarterexpenditures for electricity and naturalgas for home heating.

PCE for most categories of goodsother than motor vehicles and energywas stronger than in the second quarter.Furniture and equipment increasedmore. Food increased in the thirdquarter after small declines in thesecond, as did clothing and shoes.Services other than energy increased inline with their trend.

Fixed investmentReal nonresidential fixed investment

increased 3K percent at an annual rate,after a small decline in the second quar-ter (table 10). The swing was due toinvestment in motor vehicles.

Real residential investment con-tinued to recede, after a sharp drop inthe first quarter from a plateau main-tained in 1978. In the third quarter, itwas 7 percent below that plateau.

Single-family construction accountedfor the entire decline. The decline wasmainly due to adverse financial develop-ments. The fact that there was nostrong makeup in single-family housingstarts in the months after the severeweather supports this interpretation(chart 3). Net inflows to thrift institu-tionssavings and loan associationsand mutual savings bankshave slowedsince the first quarter, partly in re-sponse to the mid-March regulatorychanges that eliminated the premiumpaid by thrifts on 6-month moneymarket certificates (MMC's) over therate paid by commercial banks on theirMMC's and by the Treasury on 6-month bills. Although the proportionof total thrift deposits held in thesecertificates increased through August,growth in thrift MMC's decelerated.It is too early to tell whether the regula-tory changes effective in July that in-creased the return on passbook savings

Constant-Dollar Business Inventories, Final Sales and FinalSales of Goods and Structures, and Inventory-Sales Ratios

C H r

340

320 -

240

220

.300

1977-1

'M979-1

1973-1

850 900 950 1000 1050 1100Final Sales, Billions of 1972$

1150 1200 1250

340

320

CMr^

ii

*o

co

Bill

es,

i _

o+->

ver

c

300

280

260

240

220

/.470/ / -450 .

^430 1979-1.410

1975-iy

////V500 550

_L850 900600 650 700 750 800

Final Sales of Goods and Structures, Billions of 1972$Note.-End-of-quarter inventories, seasonally adjusted; final sales seasonally adjusted at annual rates. Blue lines represent ratios of inventory stocks to final sales.

U.S. Department of Commerce, Bureau of Economic Analysis 791


8 SUEVEY OF CURRENT BUSINESS October 1979

accounts will increase savings inflows.Reflecting the slowdown in net in-flows, mortgage commitments weredown from their high of last November,although they were supported by largeincreases in advances to savings andloan associations from the FederalHome Loan Bank Board and bysecondary mortgage market activity.

Interest rates continued to increasethrough the third quarter (chart 4).The average rates on contracts and oncommitments for conventional new-house loans both increased about 40basis points from the second quarter,and over 75 basis points since the begin-ning of the year. The prime ratetowhich the rate for construction loans istiedincreased to 13.25 percent by theend of September. Credit tightening bythe Federal Reserve Board in earlyOctober led to further increases ininterest rates.

Construction of multifamily units hasbeen maintained. The Section 8 HousingAssistance Program has helped sustainsubsidized rental construction. As indi-cated by construction loans for condo-miniums closed at savings and loanassociations, which increased steadilyfrom the third quarter of 1978 throughthe second quarter of this year, con-dominium construction has gainedstrength.

Inventory investment.Real inventoryinvestment was $10 billion in the thirdquarter, down from $18 billion in thesecond. The lower rate of accumulationwas attributable to inventories of motorvehicles. These inventories accumulatedat a rate of $3K billion in the secondquarter and were liquidated at a rateof $4^ billion in the third. Both autoand truck inventories were down, andas a result, inventory-sales ratios, whichhad risen to levels regarded as excessive,improved. (See the article on motorvehicles.) Inventories other than ofmotor vehiclesthe total as well asdurables and nondurables separatelyaccumulated at the same rate in thesecond and third quarters. In durables,a larger accumulation in wholesale tradewas about offset by a smaller accumu-lation in manufacturing. The latter was

Merchandise TradeCurrent Dollars Constant (1972) Dollars

B i l l i o n $5 0

-50

BALANCE BALANCE

CHART 6

Billion$50

200

150

100

50

0

EXPORTS

. ^

-

1 1 I

Total

\^ ^

W

1 i i

/

( / 'Agricultural f

. . - . , .

fionagricultufal , ' _

. : . ' ' . . . - : . ;

1 1 \ 1 1 f 1 1 1 i I 1 1

i i i I i i i I i i i I i i i I i i i I - 5 0

200

- 150

- 100

- 50

EXPORTS

I I l

Agricultural

- Vt i l l

Total .

Nenagnculttifal

1 i i i 1 i i i 1 i i i

250

200

150

100

50

0

IMPORTS

-

>

i i I I

/

Total ^ 170.0247.8! 283.5

58.8

35. 2

31.1

234. 590. 0

138. 4

184. 4213.4

235. 0

17.8

08.2

40.5

34.9

201. 8107.0154.8

210.245.2

250. 0

20.5

1,745.0 1,796.4

,724.0 1,775.7I

54.21 53.0

114. 21 119.2

450. 0 405. 8174.8 178.2281.1 287.'

08. 3

39. 5

33.9

09.2

41.0

34.

257.4! 208.0104. 81 109.9152. C>; 158. r

205. G241.4

253.4

21.0

215. 0249.3

258.2

20.7

1,865.5 1,916.2 1,947.7

1,924.11,844.3

00. 0

124.3

480. 2183.8302. 4

73.1

42.1

37.1

270. 8114.2102. 5

222. 8257.1

1,892.0

03.9

123.2

500. 5191. 0314.9

43.0

38.0

H4. 7

130. 5

508. 0195. 0313.1

43. 3

277. 8 1280. 7114.103.1

227.0205.9

264.9 270.2

21.2! 24.2

120.41(10. 3j

232.2271. 5

274. 5

23.7 24.2


16 SURVEY OF CURRENT BUSINESS October 1979

1977 1978

1978

II III IV

1979

I I I III p

Seasonally adjusted at annual rates

Billions of dollars

Table 18.Corporate Profits by Industry (6.18)Corporate profits wit]

inventory valuatio:and capital consumption adjustments. _.

Domestic industries..Financial!Nonfinancial

Rest of the worldCorporate profits with

inventory valuationadjustment and with-out capital consump-tion adjustment _

Domestic industriesFinancial i_

Federal Reserve banks.._Other

NonfinancialManufacturing

Nondurable goodsFood and kindred

productsChemicals and allied

productPetroleum and coal

productsOther

1 )urable goodsPrimary metal indus-

triesFabricated metal

productsMachinery, except

electricalElectric and electronic

equipmentMotor vehicles and

equipmentOther

Wholesale and retail trade.Transportation, commu-

nication, and electric,cas, and sanitary serv-ices

Other.Rest of the world

Corporate profits beforededuction of capitalconsumption allow-ances, with inventoryvaluation adjustment..

Domestic industriesFinancial i

Federal Reserve banksOther

NonfinancialManufacturing

Nondurable goodsFood and kindred

productsChemicals and allied

productPetroleum and coal

productsOther

D urable goodsPrimary metal indus-

triesFabricated metal

productsMachinery, except

electricalElectric and electronic

equipmentMotor vehicles and

equipment.Other

Wholesale and retail trade-Transportation, commu-

nication, and electric,gas, and sanitary serv-ices

OtherRest of the world.

150.0140.123.0

116.59.8

162.0152.123.80.2

17.0128. 373.539. 3G.2

7.0

12.213.434.21.34.37.1

4.2

9.18.2

24 .1

10. 813.99.8

271.3261.428.90.2

22.7232.5119.902.110.0

12.819.919.557. 95.2

0.4

11.67.8

13.213.730.0

43.332.29.8

167.7

157.529.2

128.310.2

180.8170.629.77.7

21.9140. 981.741.4

5.7

7.913.014.740.32.54.08.35.2

8.910.823.0

20.316.010.2

300.6

290.435. 27.8

27.4255. 2132.100. 3

9.913.0

21.721 2

05.80.7

0.913.29.0

13.310.830.2

49.737.310.2

169.4158.428.4

130.011.0

182.0171.028.97.4

21.5142.183.441.05.5

7.0

13.314.742.33.24.89.44.99.0

10.522.7

20.110.011.0

301.1290.134.37.4

20. 9255. 8133.705.9

9.513.2

22.021.1

07.97.3

7.014.2

8.914.310.2

35.7

49.437. Q11.0

175.2165.130.0

135.110.2

189.0178.830.08.0

22.0

148. 3So. 142.7

0.5

14.114.4

42.4

3.14.97.80.1

9.511.025.5

21.2

1G.510.2

309.6299.430.18.0

28.1203. 3135.507. 010.013.522.720. 9

07. 97.37.2

12.89.9

13.810.938.9

51.037.910.2

184.8175.331.5

143.89.6

198.6189.032.18.0

23.5

150. 990.045.1

0.48.9

14.815.1

45.52.95.19.85.1

9.313.325.8

22.7

17.99.6

321.7312.137.88.0

29.1274.4142.270.7

10.714.9

23 . f>21.5

71.07.2

7.4

14.98.9

13.519.839.5

52.739.99.6

178.9167.031.0

135. 911.9

193.3181.431. 98.8

23.1149. 094.148.2

5.79.0

10.417.1

40.03.85.08.25.5

11.412.018.0

21.7

15.111.9

318.8306.937.58.8

28.8209. 4147.274.410.1

15.225.423.872. 7

8.1

13.39.5

16.018.432.5

52.237.511.9

176.6164.931.0

133.

11.7

191.3179.632.09.2

22.8

147.790.049.47.08.0

19.514.2

41. 24.25.17.05.27.4

11.322. 4

18.510.111.7

321.7

310.037.79.2

28.5272. 3145. 970. 912.

14. 5

29.021.1

09.18.08.1

13.09.4

12.017.930.7

50.439.411.7

1977 1978

1978

II III IV

1979

II III

Seasonally adjusted

Index numbers, 1972=100

Table 19.Implicit Price Deflators for Gross National Product (7.1)Gross national product...

Personal consumption ependitures

Durable goodsNondurable goods..Services

Gross private domestic invest-ment. .

Fixed investmentNonresidential

StructuresProducers' durable

equipment...Residential

N on farm structuresFarm structuresProducers' durable

equipmentChange in business inven-

toriesNet exports of goods and ser-

vicesExports.Imports.

Government purchasesgoods and services

of

FederalState and local.

141. 70

140.4

129.4144.7140.7

150. 5140. 0160.0140. 7159. 3100.0159.7120.3

178. 7210.7

147.6

143. 0150.0

152.05

150.0130. 5154. 0150.9

104.4157.8174.3150. 3179. 7180.8180. 3132.3

190.3222.1

159.4154.8102.1

150.82

148.8

135.6153.7149.4

162 3150.0171.5149.0170. 7177.9170.8131. 4

188. 4220.2

157.8153. 4100. 3

153.45

151.3137.9155.7152.3

166.6159 6176.5151.7183.1184.3183.8133.0

191.1223.9

160.5154.0103. 8

156.68

153.8139.4158.0155.0

170.3162.3181.4153.4189. 5190.8189.3135.0

197. 0227.2

164.5100.1100. 9

160.22

157.8142.4104.1158.0

173.0165.4185. 2150. 4192. 0194.0192.7138.2

203.9234. 5

167.5101.9170.8

163. 81

161.3144.1168.9161.0

177.8169. 6189.0160.2199. 2200.7199. 8139. 5

210.1244.9

171.3164.8174.9

167.14

145.4173.8165.2

182.2173. 0194.9103. 2205. 2207.0205.7139. 0

217.5203. 5

174.7166.5179. 3

Table 20.Fixed-Weighted Price Indexes for Gross NationalProduct, 1972 Weights (7.2)

Gross national product...Personal consumption expend-

ituresDurable goodsNondurable goods..Services

Gross private domestic invest-ment

Fixed investmentNonresidential

StructuresProducers' durable

equipmentResidential

Change in business inven-tories

Net exports of goods and serv-

ExportsI m ports

Government purchasigoods and services.

of

P'cderalState and local.

Addenda:Final salesGross domestic product

BusinessXonfarm

143.5

141.6130.4146. 2141.2

152. 4148.7150. 0144.2159. 2

181.4199. 4

148.0145. 7149.0

143.4142.9142.8143.0

154.2

151.6137.9150.9151. 5

107. 2100.0170.7

179. 6

192. 3215. 3

159.5loo. 8102.0

154.1153. 7153. 0153.1

152.6

150.5130.8155.9150.1

105.0158. 7107.9153. 5170. 7

189. 0215. 3

157.7154.1100. 2

152. 5152.1152.0151.1

155.7

153.1139. 3158. 3153.0

109. 5102. 4172.9

182.9

192.9217.4

160.6150.1103. 7

155.0loo. 2155. 2151. 3

159.0

155.9140.9101. 0155. 7

173.9105. 5177.7

158. 5189.5

199.2222.1

164.5100.8107.0

158.9158.5158. 5157. 2

162.8

160.0144.2107.1158.7

177.1108.8181. 0101. 5192.7

205. 3229. 0

168.2104.0171.1

102. 7102. 3102. 3100. 5

166.6

163.9146. 1172.7161. 9

182. 2173.1186.4165. 6199. 3

211.4240. 9

172.0167.2175. 2

166. 4160. 0166. 3164. 8

170.4

168.4147.7178.4100. 2

187.1177. 3191.7109. 0205.4

219. 9257.1

175.7170.2179.4

170.3109. 7170.3109. 2

p Preliminary.1. Consists of the following industries: Banking; credit agencies other than banks; se-

curity, commodity brokers and services; insurance carriers; regulated investment companies;small business investment companies; and real estate investment trusts.

NOTE.Table 18: The industry classification is on a company basis and is based on the 1972Standard Industrial Classification.


October 1979 SURVEY OF CURRENT BUSINESS 17

1977 1978 I I

1978

III IV I

Seasonally adjusted


1979

II IIIP

Table 21.Implicit Price Deflators for Gross National Product byMajor Type of Product (7.3)

Gross national product..

Final sales _Change in business inven-

tories

Goods

Final salesChange in business inven-

tories

Durable goodsFinal salesChange in business inven-

tories

Nondurable goods...Final salesChange in business inven-

tories .-

ServicesStructures

141.70

141.5

136.8

136.2

134.8134.3

138.2137.4

143.3158.4

152.05

152.0

145.4

145.2

140.9140.2

148.8148.7

153.8176.2

150.82

150.6

144.8

144.2

139.6138.8

148. 6148.2

152.3173.4

153.45153.4

146.6

146.3

141.8141.2

150.1149. 9

155.1178.9

156.68

156.6

149.7

149.3

144.1143.7

153.8153. 3

158.1184.6

160.22

160.3

153.6

153.6

148.8148.0

157. 3157.7

161.4188.4

163.81

163.5

167.14

166.9

157.3 i 159.3

156. 5

151.8150.2

161. 4

158. 0

153.3152. 6

163. 7161.1 163. 0

164.4 168.6193.8 199.7

Table 22.Implicit Price Deflators for Gross National Productby Sector (7.5)

Gross national product. _Grosa domestic product

BusinessNonfarm

Nonfarm less housingHousing -

FarmResidual

Households and institutions.

GovernmentFederalState and local..

Rest of the world

141.70

1-11.2

140.7141.0142.5128.8143.2

148.3

142. 9136.5146.1

152.05

151.5

151.0150.4151. 9137.7174.2

159. 6

153.1146.2156.5

150.82

150.2

149.8149.3150.7136. 5173. 9

158.7

151. 5144.4154. 9

153.45

152.9152. 5151.8153.3138.7175.5

160.0

153.8145.3158.0

156.68

156.1

155.6154. 7156. 2141.4190. 5

163.3

157.6151.7160.4

160.22

159.5159.1157.6159. 3143.4209. 4

168.3

160.7153.4164.3

163.81

163.1

162. 8161. 7103. 6145. (5201.2

169. 7

163. 3154.3167. 7

167.14

166.3

166. 2

149. 2195.4

171.2

165. 7155.1170. 9

Table 23.Implicit Price Deflators for the Relation of Gross Na-tional Product, Net National Product, and National Income(7.6)

Gross national productLess: Capital consumption

allowances with capi-tal consumption ad-jus tment

Equals: Net national product..

Less: Indirect business taxand nontax liabilityplus business transferpavments less sub-sidies plus currentsurplus of governmententerprises

Residual .Equals: National income

141.70

151.2140.7

129. 1

142.6

152.05

163.6150.8

131.8

153.4

150.82

162.2149.6

133.1

151.9

153.45

165.2152.2

131.0

154.8

156.68

168.0155.5

131.6

158.5

160. 22

170 9159.1

135.1

162.1

163.81

175 4162.6

137.7

165.6

167.14

180 1165.8

139.0

p Preliminary.

1. Consists of final sales and change in business inventories of new autos produced in theUnited States.

2. Consists of personal consumption expenditures, producers' durable equipment, andgovernment purchases.

NOTE.Table 21: "Final sales" is classified as durable or nondurable by type of product."Change in business inventories" is classified as follows: For manufacturing,' by the type ofproduct produced by the establishment holding the inventory; for trade, by the type of prod-uct sold by the establishment holding the inventory; for construction, durable; and for otherindustries, nondurable.

Tables 22 and 24: The industry classification within the business sector is on an establish-ment basis and is based on the 1972 Standard Industrial Classification.

1977 1978

1978

II III IV

1979

II

Seasonally adjusted


Table 24.Implicit Price Deflators for Net National Product andNational Income by Sector (7.7)

Net national product

Net domestic product

BusinessXonfarm..FarmResidual

Households and institutions.Government

Rest of the world .

National income

Domestic income

BusinessNonfarmFarm

Households and inst i tu t ions .(irovernment

Rest of the world .

140.7

140.1

139.3139. 8138.8

148.3142. 9

142.6

141.9

141.4142.0124.8

148. 3142.9

150.8

150.2

149.4148.9175.8

159.6153.1

153.4

152.6

152. 2151. 9162.2

159. 6153.1

149.6

149.0148.2147.8175.9

158.7151.5

151.9

151.1

150.7150.4160.5

158.7151. 5

152.2

151.6

150.9150.3177.4

160.0153. 8

154.8154.1

153. 9153.6162.6

160.0153.8

155.5

154.8154.1153.1197.5

163.3157.6

158.5

157.7

157.5156.7186.2

163. 3157. 6

159.1

158.3

157.6156.1222.2

168.3160.7

162.1

161.2

161.0159. 9199.0

168.3160.7

162.6

161.8

161. 2160.1209.0

169.7163. 3

165.6

164.7

164. 7164.1186 2

169. 7163. 3

165.8

164.8

164.4

199.7

171.2165. 7

176. 7

171. 2165.7

Table 25.Implicit

Auto output

Final sales

Personal consumption ex-penditures

New autosNet purchases of used

autos

Producers' durable equip-ment- . . . .

New autosNet purchases of used

Net exportsExportsImports

Government purchases ofgoods and services

Change in business inven-tories of new and used autos.

Addenda:Domestic output of new

autos !Sales of imported new autos 2

Price Deflators

130.9

131.3

138. 9128.6

115.8128.8

128. 9153.6

129. 2

128. 5128.6

141.0

140.4

149.8138.4

126.8138.6

138.8174.3

141.3

138. 5138.5

140.0

139.0

147. 5137.1

126.8137.1

137.3172.4

138.0

137. 2137.1

for 1

142.9

142.6

152. 6140.6

128.7140.6

140.8177.9

143. 4

140.7140.7

\uto

143.0

143.0

153. 9141.0

126.2141.2

141.4180.2

144.5

140.9141.1

Output (7145.0

146.5

157. 3144.8

127.1144.8

145.1184.4

144.8

144.7144. 9

146.6

148.2

160. 4148. 9

141.8149. 0

149.2198. 6

154.0

148.8148.9

9)150.4

149.6

160. 8152.1

139.0152.2

152.3202.1

161. 6

152. 5152.1

Table 26.Implicit Price Deflators for Personal ConsumptionExpenditures by Major Type of Product (7.11)

Personal consumptionexpenditures

Durable goods.

Motor vehicles and partsFurni ture and household

equipmentOther

Nondurable goods

FoodClothing and shoes(1 asolinc and oilFuel oil and coalOther

Services.HousingHousehold operation

Electricity and gasOther

TransportationOther

140.4

129.4

135.7

123. 7126. 9

144.7

148. 2122. 3174.3238. 9139. 0

110.7

131.4147. 3170.0131. 9143. 2146.1

150.0

136.5145. 5

128.7132.7

154.6

162. 5125. 5182.1253. 3146. 9

150.9

140.7156. 0183.8137. 8151.3158. 2

148.8

135.6143.

165.3145. 4

139. 4155. 0183. 8136.150. 2156. 3

152.1)170. 0211.1143. (>165. 3175.1



1977 1978

Percent

1978

II III IV

1979

I II III v

Seasonally adjusted

Percent at annual rate

Table 27.Percent Change From Preceding Period in Gross Na-tional Product in Current and Constant Dollars, Implicit PriceDeflator, and Price Indexes (8.9)

Gross national product:Current dollars1972 dollarsImplicit price deflatorChain price indexFixed-weighted price index...

Personal consumption expendi-tures:

Current dollars -1972 dollarsImplicit price deflator.Chain price indexFixed-weighted price index...

Durable goods:Current dollars1972 dollarsImplicit price deflatorChain price indexFixed-weighted price in-

dex

Nondurable goods:Current dollars1972 dollarsImplicit price deflatorChain price indexFixed-weighted price in-

dex. .

Services:Current dollars1972 dollarsImplicit price deflatorChain price index. . . .Fixed-weighted price in-

dex

Gross private domestic invest-ment:

Current dollars1972 dollarsImplicit price deflatorChain price indexFixed-weighted price index.

Fixed investment:Current dollars1972 dollarsImplicit price deflatorChain price indexFixed-weighted price in-

dex . . .

Nonresidential:Current dollars1972 dollarsImplicit price deflator..Chain price indexFixed-weighted price

index

Structures:Current dollars1972 dollarsImplicit price deflator..Chain price indexFixed-weighted price

index

Producers' durableequipment:

Current dollars1972 dollarsImplicit price deflator. .Chain price indexFixed-weighted price

index _. . . . .

Residential:Current dollars1972 dollarsImplicit price deflator. .Chain price indexFixed-weighted price

index

11.65.36.06.36.4

11.05.05.75.95.9

13.69.24.14.3

4.4

8.43.54.84.9

4.9

12.54.97.37.3

7.4

24.815.4

20.812.17.87.8

8.2

14.98.65.86.1

6.3

9.39 17.16.8

6.5

17.911.75.55.8

6.1

35.020.711.811.8

11.8

12.04.47.37.47.5

11.64.56.87.07.1

12.06.15.55.6

5.8

10.23.26.87.2

7.3

12.75.17.37.3

7.3

15.97.1

17.07.19.29.5

9.7

16.78.47.77.9

8.0

22.212.28.99.2

9.0

14.16.76.87.3

7.4

17.54.2

12.812.9

12.8

19.88.3

10.69.49.6

14.45.68.39.49.6

36.626.67.97.4

7.6

13.22.6

10.311.5

11.8

9.11.47.58.3

8.2

34.815.7

32.819.311.312.0

12.6

33.323.28.28.8

9.3

60.142.212.612.5

12.4

21.415.65.07.1

7.4

32.011.018.918.7

18.6

10.93.57.28.28.3

11.94.86.87.17.2

6.4- . 77.17.3

7.5

11.96.35.36.26.4

13.85.57.97.87.8

4.5- 5 . 0

12.31.2

11.011.2

11.5

13.73.99.49.3

9.5

25.912.312.112.7

12.5

7.7.2

7.47.6

7.7

9.5-4 .915.215.2

15.0

14.85.68.78.68.9

14.26.86.97.27.4

18.113.04.54.84.7

16.98.67.78.1

8.4

10.63.27.27.2

7.3

17.16.6

17.47.59.2

, 10.0

10.6

19.311.37.27.6

8.0

25.912.711.812.2

11.6

15.810.74.65.1

5.7

13.5-1 .114.815.1

15.1

10.61.19.39.79.9

11.4.6

10.810.411.0

3.3- 5 . 0

8.79.2

9.4

9.6- 4 . 214.513.8

14.5

15.87.18.28.0

8.1

3.6- . 5

5.6- 1 . 0

6.77.6

7.7

12.94.87.77.8

8.2

2.4- 5 . 6

8.59.1

9.1

19.010.18.27.1

7.6

-8 .5-14.3

6.77.07.0

6.7- 2 . 3

9.38.89.5

6.1-2 .9

9.310.010.3

9.2-13.6

5.05.5

5.4

7.3- 4 . 512.313.9

14.0

10.42.5t. t

8.28.2

25.28.5

8 5-2 .711.511.9

12.0

9.6.810. 610.8

10.7

99 119 08.5

10.7

10 9

.2- 8 . 910.010.8

10.5

6.1-7 .214.314.3

14.3

11.02.48.48.59.6

15.14.3

10.310.711.4

9.96.23. 04.5

4.7

15.52.9

12.212. 6

13.9

16.34.9

10.911.0

11.1

- 3 . 3-12.9

11.71.2

10.410.7

11.1

13.73.69.79.7

9.9

19 55 7

13.111.8

11.9

10.52.67.78.6

8.7

7.5-4 .712.813.0

13.0

1977 1978

Percent

1978

II III IV

1979

I II III v

Seasonally adjusted

Percent at annual rate

Table 27.Percent Change From Preceding Period in Gross Na-tional Product in Current and Constant Dollars, Implicit PriceDeflator, and Price Indexes (8.9)Continued

Exports:Current dollars1972 dollars....Implicit price deflator.Chain price indexFixed-weighted price index...

Imports:Current dollars1972 dollarsImplicit price deflatorChain price index..Fixed-weighted price index...

Government purchases of goodsand services:

Current dollars,1972 dollarsImplicit price deflatorC ham price indexFixed-weighted price index...

Federal:Current dollars1972 dollars.Implicit price deflatorChain price indexFixed-weighted price

index

State and local:Current dollars1972 dollarsImplicit price deflatorChain price indexFixed-weighted price

index

Addenda:

Final sales:Current dollars1972 dollarsImplicit price deflatorChain price indexFixed-weighted price index...

Gross domestic product:Current dollars _1972 dollarsImplicit price deflatorChain price indexFixed-weighted price index...

Business:C urrent dollars -1972 dollars....Implicit price deflator..Chain price indexFixed-weighted price

index

Nonfarm:Current dollars1972 dollarsImplicit price indexChain price indexFixed-weighted price

index

Disposable personal income:Current dollars..1972 dollars...

7.72.45.25.25.3

19. 69.79.07.78.1

9.72.07.57.67.5

11.34.46.66.8

7.0

8.7.6

8.18.0

7.9

11.04.85.96.36.4

11.05.35.96.26.4

11.95.95.66.0

6.2

12.15.85.96.0

6.5

10.24.2

17.810.66.56.16.0

17.111.15.47.78.0

9.91.88.07.77.8

5.7- 2 . 0

7.87.1

6.9

12.44.08.18.0

8.3

12.14.47.47.47.5

12.04.47.37.47.5

12.44.77.37.4

7.6

12.45.46.76.9

7.0

11.74.6

54. 738.212.011.010.6

13.66.56.7

10.310.0

8.8.9

7.87.17.1

-7 .0-12.3

6.10 . 6

0. 2

18.59.38.48.0

8.4

19.38.79.89.49.6

19.68.1

10.69.49.7

21.99.2

11.610.210.5

22.111.010.09.0

9.3

12.74.0

16.810.26.07.16.9

14.37.06.84.14.0

12.35.06 97.67.6

11.78.23.25.5

5.3

12.63.39.08.7

9.1

12.34. 67.48.28.3

11.13.67.28.28.3

11.73.97.58. 68.8

11.94.57.08.7

8.9

11.44.2

22.37.1

14.213.313.8

16.910.26.18.69.1

12.21.8

10.29.5

10.0

18.73.2

15.013.012.8

8.91.07.87.7

8.2

14.85.78.68.68.8

14.85.68.78.78.9

15.56.48.58.5

8.7

14.96.67.87.6

7.7

13.86.4

26.411.513.412.812.9

9.2-3 .813.513.714.1

5.6- 1 . 8

7.69.49.4

12.17.24.67.6

8.2

2.3- 6 . 6

9.510.310.1

11.01.19.89.79.9

10.1. 9

9.19.69.9

10.11.09.19.7

10.0

9.81.77.98.5

8.5

13.02.1

9.1- 3 . 112.611.912.4

33.212.118.924.421.2

5.8- 3 . 3

9.49.09.2

- 4 . 6- 1 1 . 3

7.57.3

7.9

11.91.6

10.19.9

10.0

4.2-3 .9

9.58.99.5

6.9- 2 . 1

9.29.79.4

7.0- 2 . 5

9.89.1

10.1

7.3- 2 . 810.410.111.3

7.4-1 .4

42.624.114.916.717.1

35.41.0

34.135.429.8

8.5.2

8.29.19.0

1.9-2 .0

4.07.0

7.6

12.11.5

10.410.2

10.0

13.84.88.58.5

11.02.78.18.19.3

11.68.58.5

10.0

3.1

9.1

p PreliminaryNOTE.Table 27: The implicit price deflator for GNP is a weighted average of the detailed

price indexes used in the deflation of GNP. In each period, the weights are based on thecomposition of constant-dollar output in that period. In other words, the price index for eachitem is weighted by the ratio of the quantity of the item valued in 1972 prices to the totaloutput in 1972 prices. Changes in the implicit price deflator reflect both changes in prices andchanges in the composition of output. The chain price index uses as weights the compositionof output in the prior period, and, therefore, reflects only the change in prices between thetwo periods. However, comparisons of percent changes in the chain index also reflect changesin the composition of output. The fixed-weighted price index uses as weights the compositionof output in 1972. Accordingly, comparison over any timespan reflect only changes in prices.


By ROBERT BRETZFELDER and HOWARD FRIEDENBERG

Second-Quarter Deceleration in State Personal IncomeOTATE personal income increased 2.2percent in the second quarter of 1979after an increase of 2.8 percent in thefirst quarter. Private nonfarm wag-e andsalary disbursements (payrolls), whichincreased 1.9 percent in the secondquarter compared with 3.4 percent inthe first, more than accounted for thedeceleration. They decelerated in 40States and the District of Columbiaand accelerated in 10 States.

Nationally, the deceleration was mostpronounced in manufacturing, and, inthe States, it was generally larger inth ose in which manufacturing accountsfor a large share of private nonfarmpayrolls. The deceleration was large2 percentage points or more comparedwith a national average of 1.5 percent-age pointsin 21 States; in most of

these, manufacturing's share of privatenonfarm payrolls was above the na-tional average (table 1). Twelve of the21 States were in the Northeast-GreatLakes manufacturing belt. In each ofthe 12, payrolls in both durables andnondurables manufacturing contributedto the deceleration and, partly as aresult, so did payrolls in service-typeindustries. Second-quarter declines inmotor vehicle production were a majorfactor in a substantially smaller increasein Ohio and a decline in Michigan.

Six of the remaining nine States witha large deceleration were in the South-east. In each of the six, payrolls inmanufacturing and related service-typeindustries and in construction (exceptin Arkansas) contributed. In West

Virginia, in addition, mining payrollsdeclined after increasing in the firstquarter. In each of the other threeStatesNevada, Arizona, and SouthDakotapayrolls in construction andservice-type industries contributed. InNevada and Arizona, the weakness inservice-type payrolls partly reflectedthe adverse effects on the tourist in-dustry of the second-quarter gasolineshortage in California.

Among the 10 States in which privatenonfarm payrolls accelerated, onlyMaryland, New Mexico, Alaska, andOklahoma registered an acceleration of1 percentage point or more. In each ofthese four States, payrolls in construc-tion and mining (except in Maryland)contributed to the acceleration.

Table 1.Change in Private Nonfarm Wage and Salary Disbursements (Payrolls)

Ranks

Total

Percent change

1978 :TV-1979:r

1979:1-1979:IT

TotalManufacturing

Total Durables NondurablesConstruction Mining Service-type'

Deceleration () or acceleration (+) (in percentage points)2

Addenda:Mfg. as apercent of

total, 1979: I

United States.States with large deceleration:MichiganWest VirginiaNevada'. - -OhioNew HampshireIndianaGeorgiaTennesseeVermontD elawareMississippiLouisiana.South Dakota. .Rhode is land. .MaineConnect icut . . .ArkansasArizona...Massachusetts.New JerseyWisconsin

Average.

States with large acceleration:Marylan dNew MexicoAlaskaOklahoma

Average.

3.4

2.33.95. 04. 35.1-1.03.43.34.2

4.14.33. 62.(i3.63.84.o5.73.83.74.2

1.53.1

1.9 I

i .9

-2 .9-1 .2

.61.7

.41.3

-1 .1

1.41.71.1.2

1.21.52.23. 51.71.72.2

3.04.2

4.4

3.1

1.5

5.25.14.23.73.43.32.92.92.92.7

2.72.02.52.42.42.32.32.22.12.02.0

- 2 . 8

- 8 . 9- 1 . 3- 1 . 8- 7 . 4- 4 . 0- 5 . 2- 1 . 5- 2 . 9- 1 . 8- 0 . 2- 2 . 1- 3 . 4

4.7- 2 . 5 1- 2 . 5 i- 4 . 9 |-(>. 4

. 15. 5- 3 . 3- 2 . 5

1.51.11.11.0

1.2

-3.2

1.5- 4 . 4

4.6- 3 . 2

- . 4

-3.4

-10 .5- 3 . 0

.2- 7 . 2- 5 . 5- 5 . 8

-1.1- 5 . 1- 1 . 8

-20. 3- . 9

- 1 . 5- 4 . 0- 1 . 6- 1 . 9- 4 . 5- 7 . 3

.4-(>. 4- 3 . 5

1. C)- 2 . 4

-29. 0- 3 . 7

- 8 . 4

- 1 . 4

- . 22.5

-(i.O- 7 . 8- 1 . 4- 3 . 1- 5 . 1- 1 . 0- 1 . 3- 1 . 3

- 5 . 0- 4 . 914.5

- 4 . 3- 2 . 9-(',. 8- 5 . 2- 1 . 0- 3 . 5- 3 . 0- . 5

-2.3

1.3- 8 . 1

23. 5- 2 . 5

3.0

3.1

8.3- 8 . 7- 2 . 7

8.4- 1 5 . 3

1.2- 0 . 7-(>. 6

-18 . 015.1

- 9 . 2- 3 . 3- . 8

-19 .8.(>

- 2 . 98.3

- 5 . 97.1

- 2 . 7- 3 . 0

-2.7

15.22.29. 7

16.8 j11 .0 I

3.9

3.7-7.2

7.012! 51.15.2

- 2 . 4- 3 . 6

06. 9

- . 2- 6 . 1

000

5. 710.1

()5. 0

-20 .2

3.4

08.77.6

- 1 . 4

- 2 . 3

- 3 . 0. 7

- 1 . 0

34.0

-2.7-6.0-4.9-1.7-1.1-1.9-3.2-2.6-1.9-1.8

-2.2-2.7-4.1.6-2. C)- . 2-1.0-3.1- . 9-1.1-1.2

51. 528.86.4

Hi. 841. 351. 330. 939.339. 047. 5

38.721. 515. 442.739. 442.838.721.535. 637.745. 6

36. 3

24.911.4

9. 424.617.6

1. Wholesale and retail trade, the finanee-insurance-real estate group, the transportation-communication-public utilities group, and services.2. The difference between the percent change, 1979:1 1979:11, and the percent charge, 1978:IV-1979:l.3. Ranked by deceleration or acceleration in total private nonfarm payrolls (column 3).

19


20 SUEVEY OF CUEEENT BUSINESS October 1979

Total Personal Income, States and Regions 1

[Millions of dollars, seasonally adjusted at annual rates]

State and region1976 1977

II III IV II III IV

1978

II III IV

1979

II

United States..

New England .

ConnecticutMaineMassachusettsNew Hampshire___Rhode IslandVermont

Mideast.

DelawareDist. of Columbia.MarylandNew JerseyNew YorkPennsylvania

Great Lakes.I l l ino is . . . .IndianaMichigan..OhioWisconsin.

Plains.IowaKansasMinnesotaMissouriNebraskaNorth Dakota.South Dakota.

Southeast

AlabamaArkansasFloridaGeorgiaKentuckyLouisianaMississippiNorth CarolinaSouth CarolinaTennesseeVirginiaWest Virginia

South west .ArizonaNew MexicoOklahomaTexas

Rocky Mountain..

Colorado...IdahoMontana. .UtahWyoming.

Far West . . . .

CaliforniaNevadaOregonWashington

Alaska..Hawaii.

Addenda:New EnglandMiddle AtlanticEast North CentralWest North Cent ra l . . .South AtlanticEast South CentralWest South Centra l . . .MountainPacific

1,329,369

77,456

22,0055,522

37,0284,7835,6162,503

285,316

4,0125,51228,21352,198122,18573,195

263,890

79,04232,03459,28866,28127,240

98,823

16,99614.42723,69827,5369,1323,0923,341

258,807

18,28710,22949.42820,02718,01020,00210,38729,08714,27021,90230,7829,729

108,788

12,7870,00315,30274,696

33,944

10,2004,5994,1980,3512,531

192,276

149,5504,25514,32824,143

4,008 !6,000 |

77,450247,578263.89098,823197,00208,592120,28956,990198,089

1,356,355

78,943

22,4345,00037,0884,9005, 7172,544

289,714

4,1325,530

28,83352,973123,54874,092

270,382

80,80932,90001,08907,77027,749

100,573

17,38214,65824,18527,9719,3263,7443,300

263,691

18,55910,37250,30127,10018,23920,68810,59323,51014,52022,35031,4819,900

111,278

13,0050,14915,57270,491

34,556

10,0204,5274,2770,5282,004

196,888

153,1434,40014, (44624,699

4,1800,143

1,386,770

81,071

23,0215,81838,0285,0905,9022,011

296,260

4,1285,65929,45954,234120,34076,439

275,508

82,67633,37062,03809,12328,301

102,504

17,08314,80724,87128,5669,4303,7003,380

268,826

18,90510,44351,01127,00218,09221,07310,70230,17814,94122,80532,30910,040

114,222

13,2980.28210,00578,577

35,563

10,9414,9844,2780,0842,070

202,302

157,4284,54315.07025,201

4,2830,232

1,424,567

82,801

23,5955,95839,3975,2085,9852,658

300,934

4,2525,80729,90555,094127,82677,989

283,353

84,72034,41204,10570, 93529.122

105,849

18,32015,30425,00129,3799,0903,7733,710

277,139

19,59010,83052,87128,51719,19021,88711.12330,75715,19223,44833,24410,478

118,175

13,7310.50010,00981,275

36,698

17,5185,0794,4000,9192,770

208,936

102,3724,73315,70720.124

4,3040,378

1,464,740

84,889

24,2930,03040,3125,3880,1422,717

307,687

4,2795,93230,52050,530130,51279,908

291,844

87,20535,40466,07872,54930,008

109,166

19,07315,58226,98530,2069,9873,5813,752

284,566

20,00711,33954,37729,15519,81922,54411,49131,53315,60624,12633.89410,676

121,972

14,1770.09517,11083.990

37,445

17.9425,0734,4197,1402,872

216,117

108.0054,96210,35126,799

4,4990,555

1,501,303

86,470

24,6856,14041,1375,5220,2182,768

312,697

4,4140,071

31, 20257,423131,98281,606

300,321

89,18836,58008,52074,94131,079

111,920

19,55215,89827,78231,09010,1173,0013,820

292,484

20,01911,58355,82829,97420,45323,28311,75932,25410,03024,83734,81011,049

126,177

14, 0380,90017,78380,857

38,583

18,5025,1894.5287,3513,012

221,641

172,4085,10810,82127,243

4,372C, 038

1,540,682

88,119

25,1170,24841,9045,070(>, 3572,817

319,192

4,4900,19131,73958,576134,74483,446

308,913

91,39737.38970.75777,42531,945

115,161

19,95316,37128,42532,15310,4133,7734,072

300,601

21,14211,92457.89930.87420,83023,79412,21832,94516,43325,49235,77911,209

130,047

15,0417,11218,32689,508

39,888

19,1225,3554,7107,5073.135

227,849

177,0055.31217,40128.131

4,150 :(..750 j

1,587,799

90,970

20,0070,40043,1325,9100,5332,917

326,435

4,0210,30732,67659,953137,01885,200

315,681

93.57238,41871,95778,92132,813

120,905

20,85717,48029,00233,18010,9774,2994,444

310,097

21,85812,27059.75032,13721,52224,52512,50934.03110,99226,39136,62511,480

134,558

15,0287,35219.00592,574

41,768

19.9905, 0025,0037,8913,277

236,109

183,140 I5.544 ;18,23129,194

4,2317,045

1,626,104

92,839

20,4030,58144,0130,1120,0273,042

333,181

4,7420,40733,40401,483140,44080,639

324,312

90,17839,27074,80080,17833,880

123,801

22.08717,34330,40833,94311,0994,3614,500

315,832

22,20912,47001,04232,50421,47425,26412,75134,78517,52920,92837,41210,804

137,795

10,3017.53519,20994,750

42,747

20,4435,7945.0528,0993,300

244,068

188,9275,82118,80430.455

4,3857,144

1,680,604

95,596

27,2250,77845,2370,2850,9203,151

342,933

4,9210,57034,13803,427144,03289,838

334,623

99,20140,84576,01883,22234,730

127,729

22,09018,08431,11335,05411,0934,4804,009

328,755

23,20812,83503.52433.51022,94820,18313,12535,98318.00828,11139.03312,28G

143,573

10,9217.82020,06098,772

44,482

21,1880.0375.2008.4433,014

251,261

194.2380,05219,47931,491

4,3307,310

1,733,783

98,195

28,0030,93140,4050,4937,0823,221

351,402

5,0500,737

34,95005,060

147,30492,230

343,809

101,58742,14578,82785,04135,008

130,940

23,40718,70431,70035,93911,9424,5784,004

339,891

23,95713,25900,47734,59023.50227,11513.43937,09218.50028,99139,92112,910

149,223

17,0708,12020. 908102,459

45,886

22,0120,2055,2508,0953,718

262,411

203,5050,37519,90432,626

4,4307,590

1,793,688

100,650

28,0987,17747,3470,7457,3093,373

362,426

5,1770,95730,09207,147152,01195,043

353,732

103,39743,38981,52188,08730,738

138,303

24,49719,88933,58337,21512,7375,2835,099

352,144

24,78013,02508,09235,73724,47427,99013,84738,82519,28030,08041,00413,200

155,322

18,5158, 39721,980100,424

48,257

22,9380,5875,6909,1033,939

I209,3020,00820,85433,660

4,5027,809 |

1,843,101

103,641

29,5547,37648,7700,9937,4453,497

370,484

5,3147,05836,00708,962155,37797,107

364,697

100,92044,84483,11791,77538,040

140,924

25,53120,13734,08438,21012,7745,0385,144

362,601

25,50814,38570.87930,79425.18228,92214.30139.87519,87830,93542.30213,580

159,766

19,3548,02222,529109,200

49,593

23,0190,7025,7149,3974,100

270,544 I 278,863

215,4570.92321,52134,902

4,5687,905

By census regions

78,943251,213270,382100,573201,39109,742123,12358,170

202,818

81,071257,014275,508102,504205,39371.104126,15859,686208,273

82,801 !200,910 !283,353105,849211,08373,303130,00161,661

214,885

84.8892(56.950291.844109,166215,97775,443134,98263,279

222,209

80,271,300,111,221,77,139,65,

227,

88,119 I276,767 I308,913 I115.101 !227.62679,082143.01267.353

90,970282,771315,681120,905234,08482,280148,37570,292

233,449 241,841

92,839288.508324,312123.801239.34983.302151.09472.405

241). 775

95,590297.298334,623127.729247,98087,393157,85075,275

256,800

98,195304.000343,809130,940256,30589,948103,80178,058208.001

100,050314,201353,732138,303205,56893.186170,02581,837276,187

103,321,304,140,272,95,175,84,

284,

1,883,330

105,591

30,1137,49649,755m3,549

378,2565,3227,22437,03070,344158,57499,150370,021

110,28045,44582,45392,92138,917

144,501

20,31820,80834,91039,00013,2405,0075,140

370,446

25,91414,42273,42337,30125,70529,49114,31341,07320,34031,30543,50913,050

164,740

19,8708,91323.349112,009

50,922

24,2310,8015,9179,0444,209

286,156

220,7537.05322.30430,040

4,5958,103

105,591328.073370,021144.501279,47997,230179,87086,757291,801

1. The quarterly estimates have been revised for the years 1973-78. Revised estimates forthe years not shown are available on request from the Regional Economic MeasurementDivision, Bureau of Economic Analysis, Washington, D.C. 20230.

The estimates shown are consistent with the annual totals published in the August 1979Part IT SURVEY OF CURRENT BUSINESS.

NOTE.The quarterly estimates of State personal income were prepared by Robert L.Brown and Robert M. Lipovsky with the aid of Thelma E. Harding under the supervisionof Edwin J. Coleman. The table was prepared by Eunice P. James.


By DOUGLAS R. FOX

Motor Vehicles, Model Year 1979

ALES of new motor vehicles declinedto 14.7 million in the 1979 model yearfourth quarter 1978 to third quarter1979from a record 15.3 million in1978. Both new passenger car and newtruck sales were down. Large increasesin the price of gasoline in the first andsecond quarters of 1979 and a gasolineshortage in the second quarter affectedsales of both cars and trucks and raisedthe market shares of domestic smallcars and imports and the market shareof imported trucks. Inventories of thesevehicles were tight by the end of thesecond quarter, but inventories of manydomestic large cars and light truckswere excessive. At the end of the modelyear, manufacturers responded withsales incentives to reduce inventoriesand restore balance. Production of bothcars and trucks was strong at the be-ginning of the model year but weakenedas the year progressed.

New Cars

Retail sales of new passenger carstotaled 11.0 million in the 1979 modelyear, down from 11.3 million in 1978.The decline was more than accountedfor by domestic sales, which fell from9.3 to 8.7 million. Import sales were upslightly from 2.0 to 2.2 million and ac-counted for a record 20% percent oftotal sales.

On a quarterly basis, sales were flat at11.2 million (seasonally adjusted annualrate) in the fourth quarter of 1978,peaked at 11.7 million in the first quar-ter of 1979, dropped sharply to 10.5million in the second, and recoveredslightly to 10.8 million in the third(chart 7). Domestic small car and im-port sales increased through the first

three quarters of the model year, reachingrecords of 4.0 million and 2.5 million,respectively, before declining somewhatin the last quarter. Intermediate carsales declined through the first threequarters of the model year and re-covered strongly in the last quarter.Full-size car sales were strong in thefirst two quarters of the model year,then dropped steeply, and partly re-covered in the last quarter.Gasoline shortage and price increases

Major factors affecting the patternof sales in the first and especially thesecond quarters were the large increasesin gasoline prices and the gasoline short-age. As was the case during 1973-74,the gasoline shortage resulted in long-lines at the pumps in many areas andin the introduction of rationing pro-grams such as restricted days for pur-chase based upon license plate numberand max imum and /o r min imumamounts for purchases. The averageretail price of regular gasoline in 52cities jumped 39 percent from the thirdquarter of 1973 to the second quarterof 1974, and, after increasing graduallyover the next 4^ years, jumped 37 per-cent from the fourth quarter of 1978 tothe third quarter of 1979 (chart 8). Re-flecting concern over the price and avail-ability of gasoline, the composition ofnew car sales shifted toward smaller,more fuel-efficient domestic small carsand imports in both 1973-74 and 1979(chart 9). In the third quarter of 1973,prior to the oil embargo, domestic largecars (full-size and intermediate models)accounted for 60 percent of total newcar sales, a percentage they had heldfor the previous 2 years. As the embargobegan to take effect, the large car shareof sales declined to 53 percent in the

CHART 7

Retail Sales of New Passenger CarsMillion units (ratio scale)

6

5

4

3

2

1

SALES

A

-

1/ /

V'/A/y

BY DOMESTIC SIZE CATEGORY AND IMPORTS

\ Full-SizeV

A // VIntermediate

1Ji . i 1

\

\ V11 11 1 1

Small ,

V // V i\ // AA // / \ _.\\ // / ^ A\\ / / \\\ / /S /

Import

> 1 i i i 1 > i . 1 i . i 1 i i i

-

1 \\ _

v-m/ /f yr

I . . .1972 73 74 75 76 77 78 79

Seasonally Adjusted at Annual RatesNote.-The components may not add to the total because each category wasseparately adjusted for seasonal variation.Data: Motor Vehicle Manufacturers Association of the United States, Inc. andWard's Automotive Reports; seasonal adjustment by BEA.

U.S. Department of Commerce, Bureau of Economic Analysis 791

21



fourth quarter and bottomed at 50 per-cent during the height of the gasolineshortage in the first quarter of 1974.Over the same period, the domesticsmall car share increased from 25% to34 percent, and the import share from14K to 16 percent. After the shortageswere alleviated and the price increasesabated, the large car market sharepartly recovered to 52% percent.

During 1979, a similar shift in salescomposition occurred. In the fourthquarter of 1978, large cars accountedfor 51% percent of total sales, about thesame market share as 4 years before.Domestic small cars held 31% percentand imports 17 percent of the market.As in 1973-74, sales began to shiftcoincident with the price increases andprior to the peak shortages. At theheight of the shortage in the secondquarter, large cars accounted for only38% percent of total sales; domesticsmall cars and imports establishedrecord shares of 37% and 24 percent,respectively.

Fuel economy

The shift in the composition of newcar sales aided the manufacturers inmeeting the Corporate Average FuelEconomy (CAFE) standard for 1979 ofL9.0 miles per gallon (mpg). The CAFEfor each manufacturer is based on theaverage mpg ratings and number pro-duced of its models. According to pre-liminary Environmental ProtectionAgency (EPA) estimates, the average forall 1979 cars was more than 20.0 mpg,well above the standard, and each man-ufacturer exceeded its own CAFE pro-jection made at the beginning of themodel year.

Most of the improvement in theoverall fuel economy of new cars inthe last several years can be attributedto the production of more economicalcars rather than to a shift in sales com-position. Downsizingthe reduction ofexterior size and weight without affect-ing interior sizeof intermediate andfull-size models and the introductionof new model small cars raised averagefuel economy per model. As a result ofthe downsizing program, most inter-mediate and full-size models are smallerthan they were several years ago,

CHART 8

Gasoline PricesCents per gallon110

3QI I I I I I I I I I I I I I I I I I1972 73 78 79

Note.-Major-brand regular in 52 cities, including taxes. Not seasonallyadjusted.Data: Oil and Gas Journal

U.S. Department of Commerce, Bureau of Economic Analysis

although the size categories remainunchanged. A popular full-size modelthat had a wheel

SCB_101979

Documents

Transcript of SCB_101979