7/17/2019 frsbog_mim_v56_0096.pdf

http://slidepdf.com/reader/full/frsbogmimv560096pdf 1/3

BOARD OF

G O V E P ~ Q R S

OF THE

FEDERAL RESERVE SYSTEM

STATEliENT FOR THE PRESS

R-987

96

For

release in

morning

papers,

Saturday,

May

23,

1942.

The

f ollov;ing

swrunary

of general

busi

ness

and

financial

conditions

in

the

United

States,

based upon s ta t i s t i cs

for April

and the f i r s t

half of May,

will appear

in the

june issue

of

the

Federal Reserve

Bulletin and in

the

monthly

reviowsof the

Federal

Reserve

Banks.

Industr ia l activi ty increased

in

April and thA f i r s t

half

of May

ref lect ing

continued advances

in armament

production.

Follov,ing

an

increase

in

buying

during

the

.f irst

quarter,

re ta i l

t rade

declined

somewhat.

Whole

sale commodity

prices

advanced

further.

Production

Expansion of industr ia l prorluction in April WF .s reflected in

an

advance

in

the Board s seasonally d,iusted index from

172 to

l?h per cent

of

the 1135-39 average.

This

increase

follmYed

upon a

veriod

of re la t ive

s tabi l i ty during the :f irst quarter

of

the year,

when growing

war production

vras offset by decrea.sc:d

civil ian

output.

Since

the

beginning

of the

year

to ta l

volume of industr ia l output

has

shown

l i t t l e

change

but

there

have been marked

differences

arnong

indi

vidual

industr ies . In

general

output of

machinery, chemicals,

and

armament

of

a l l

kinds

has

continued

to exps.nd a t a rapid rate. There

have

a:u:o

been

substantial increases in output of

electr ic

s tee l nonferrous metals,

glass

containers, wood pulp, and coal. On the

other

hand,

output,

of many proaucts

for civil ian use ::;uch

as

automobiles,

t i res

and tubes, wool

t ex t i l es

elec

t r i ca l appliances cclcoholic beverages petroleum, and petrolmllll

products

has

been sharply reduced

ei ther

by

direct

order

or

by

shortages

of material

or t ransportat ion faci l i t ies .

In the month

of

April

crude petroleum

a nd

petroleum products were

the

principal commodities showing a

decline

in out

put. Output of furniture, cotton and

rayon

text i les

m<mufactured

foods,

paper

proaucts,

and

tobacco

products

hab

been

maintained

in

large

volume.

Value of

construction

contracts awarded in

April ,

aC

reported by

the F. W Dodge Corporation,

iV lS

Rlmost one-f if th below the high March to

ta l ref lecting a decline in publicly financed construction. Residential

contracts

decreased by one-fourth anJ

for

the

month were a t

about the same

level

as l as t year. ·

Awards for

non-residential

building incro:.ascd

r;lieht1y,

mainly because

of a

40

per

cent increase

in

awards

for factory construction,

pract ical ly

a l l publicly

financed.

In the f i r s t .four

munths

of l9Lt2,

to ta l

avmrds ·were

about one

fourth

greater than in

the corresponding

P ~ r i o d

l as t year;

public

awards

7/17/2019 frsbog_mim_v56_0096.pdf

http://slidepdf.com/reader/full/frsbogmimv560096pdf 2/3

  .

-2-

mere

than doubled, while

those for

private

f i f ths .

Public awards in

th i s

period made

compared

1'Jith

about 40

per cent las t year.

D_ stribution

97

R-987

projects

were dov:n

by about

two

up over 70 per cent of the tota1,

Retai l sales

declined

somewhat in April , follorliing

' '

considerable

amount

of ant ic ipatory buying during the f i r s t quarter

of

th i s year.

At

departn1ent

s tores , dol lar

sales

in

April were about 10 per

cent

below

the

f i r s t

quarter average, making

allowance

for usual seasonal variat ions , but

were 5 per

cent above

the l eve l prevnil ing

ciuring

the l a t t e r part o.f 19 ,.1.

.During

the f i r s t half

oi'

May sales

showed a further decre::tse ard were

ar Ound

6 pr:::r cent l a rger thrm a year ago in contrast with price incre&.ses c:m,ount

ing

on the average to

about

20 per cent over the year period,

Total

f re ight car loadings increased sherply in Lpri l owing ch.iefl.y

to larger shipments of coal and forest pr·oducts, and to a sharp r i se in iron

ore loadings as

+,he

Great

l...akes

ship:)inp, season

got

undervray.

Shipments

of

merchandise in

l e ss than carlor.d lo t s which

had

begun to

decline

n March,

were

reduced

sharply

further in April , ref lec t ing Government

action

to in

crease the average

load

per car in

order

tu effect f u l h ~ r ut i l izrt t ion of

rai l road

equipment.

Commodity

nrices

Beginning

on

May 11, wholesale prices of most

conunodities

were

l imited

to the highest

levels

reached

during

March, accordinr:; to

the

general

maximum

price regulation

issued April 28.

Effective May

18, re ta i l prices

of most commodities were Ukevlise lir,li

ted.

H.t;tail prices of related

serv

ices wil l

be

l imited

bet;inning

July

l

About

30

new maximum price scheduJ.,-;s for

indus t r ia l

products

were

issued from

the middle

of April to

the

middle of

l v l a ~ r .

11ost of

these

cov-·

ered wholesale prices of items previously

r ; u b ~ j e c t

to inforrnal or temporary

controls .

Upward

adjustment3

in maximum ;)rices

were a.lloned for coal, fer -

romanganese,

t i reR,

petrolewn

products,

and a

few

othr:;T

items.

.

Wholesale

prices

of most farm pr·odncts and

basic

foods, which

are

exempt from direct control , showed l i t t l e chcmge in th i s period, fflllu;.;ing

sharp increases ear l ie r in the year.

Bank credi t

During the f ive weeks ending

May

20 Federal Heserve J ~ m k holdings

of

Government secur i t ies

increased

by about

200

mil1ior; dollar:>, whilf; cur

rency in

circulat ion

rof.1e y 260

rr,illion. 1 v i " ~ m b e r 'bank

deposits incr:;ased

during

the

period and required r e : : o • e : r v e ~ : sho·,ved a c : : : r r , , : ; ~ > p o n d i n g growth. The

net resul t was a decline of 300 Htillion in excess

r e ~ w r v c : s

Holciings of

United States

securi t ies

a t

" : - J a n ~ s

in

len.din.;· c i t i e s

i n e r e < ~ s e c i

further, while

corruncrcial

loans declined. L i q ~ l i d J t i o n oi' lol"lns

wc-1s

concent,ra

ted

a t banlcs

7/17/2019 frsbog_mim_v56_0096.pdf

http://slidepdf.com/reader/full/frsbogmimv560096pdf 3/3

-3-

R 937

in New York City and in the Kansas City

dist r ict

lnited

States

Government

security prices

Prices

of

U. S o v e r r ~ e n t bonds declined in

the last

half

of

April, but steadied in

the

f i rs t

half

of May.

Rates on current Treasury

bi l l

issues ro;;;e from about 0

2 per cent in

March to

0.

36

per

cent in May

The

Federal

Open Market Conunittee announced on

April

30 that

Federal

Re-

serve

Banks

stood ready to

purchase

al l Tr2asury

bil ls

offered at 0.375

per cent.