Greenbook/Tealbook
Prefatory Note
The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that this document may contain occasional gaps in the text. These gaps are the result of a redaction process that removed information obtained on a confidential basis. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act.
1
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CONFIDENTIAL (FR) CLASS III - FOMC
March 23, 1990
SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS
Prepared for the
Federal Open Market Committee
By the Staff Board of Governors of the Federal Reserve System
TABLE OF CONTENTS Page THE DOMESTIC NONFINANCIAL ECONOMY Business fixed investment .
. . . . . . . . . . .
Table Business capital spending indicators . . . . . . . THE FINANCIAL ECONOMY Tables Monetary aggregates . . . . . . . . . . . . . . . Commercial bank credit and short- and intermediate-term business credit . . . . . . . Selected financial market quotations . . . . . . .
3
THE INTERNATIONAL ECONOMY .
. . 6
Import and export price measures . . . . . . . . .
7
Prices of exports and imports in February
.
. .
Table
SUPPLEMENTAL NOTES
DOMESTIC NONFINANCIAL ECONOMY Business Fixed Investment The most recent data on orders and shipments of nondefense capital goods are consistent with the Greenbook outlook for considerable strength in current-quarter real outlays on equipment by domestic and foreign purchasers.
Shipments of nondefense capital goods rose 4.4 percent (monthly
rate) in February, after a 0.6 percent advance in January.
Excluding the
aircraft group, shipments rose 2.6 percent in February on the basis of an increase in communication equipment and small advances in many categories of industrial machinery.
As a result, the average level of shipments
(excluding aircraft) during January and February was 1.5 percent (not at an annual rate) above the fourth-quarter average. New orders for nondefense capital goods fell 5.7 percent in February, after a 13.7 percent decline in January.
However, the movement in both
months was caused by large dropoffs in orders for aircraft and parts. Excluding the aircraft group, orders rose 2.6 percent in February, after falling 4.2 percent in January, and average orders during January and February were 3.4 percent above the fourth-quarter level.
The increase in
February orders (excluding aircraft) was almost entirely accounted for by communication equipment, for which bookings had moved sharply lower in January.
Orders for industrial machinery rose, on balance, in February, as
they had in January; however, bookings for office and computing equipment fell 2.4 percent.
-2BUSINESS CAPITAL SPENDING INDICATORS (Percentage change from preceding comparable periods; based on seasonally adjusted data)
Q2
1989 Q3
Q4
1989 Dec.
J7..
3.0 3.0 6.1 2.3
2.2 -.2 -1.0 .0
-2.7 -.4 -2.1 .1
Shipments of complete aircraft'
14.7
46.2
Sales of heavy-weight trucks
-3.7
1990
2.5 2.9 5.9 2.2
.6 -2.1 -1.1 -2.3
-42.0
13.2
60.4
-2.2
-4.7
-.3
8.0
-1.8
1.0 2.9 1.8 3.1
-2.5 -4.2 6.5 -6.6
4.7 2.2 -2.5 3.4
14.1 3.3 .4 3.9
-13.7 -4.2 -.7 -4.9
-5.7 2.6 -2.4 3.8
Construction put-in-place Office Other commercial Public utilities Industrial All other
-.8 -3.4 -6.5 3.8 3.9 .3
1.9 -3.5 5.4 -1.8 7.0 5.3
-.7 -2.6 1.3 -.3 2.3 -3.2
-3.9 -1.6 -8.8 1.6 -3.9 -7.0
4.5 -.4 4.4 .7 14.7 7.2
Rotary drilling rigs in use
16.2
3.0
-2.7
-3.4
.0
Feb.
Producers' durable equipment Shipments of nondefense capital goods Excluding aircraft and parts Office and computing equipment All other categories
Orders of nondefense capital goods Excluding aircraft and parts Office and computing equipment All other categories
4.4 2.6 -1.8 3.6 n.a.
Nonresidential structures n.a. n.a. n.a. n.a. n.a. n.a. 2.4
1. From the Current Industrial Report (CIR) titled "Civil Aircraft and Aircraft Engines." Seasonally adjusted with BEA seasonal factors. To estimate PDE spending for aircraft, BEA uses the aircraft shipments shown in that report, not the corresponding Census M-3 series. The CIR does not provide information on aircraft orders. n.a. Not available.
-3MONETARY AGGREGATES (based on seasonally adjusted data unless otherwise noted)
19891
1989 Q3
1989 Q4
1989 Dec
1990 Jan
1990 Feb p
Growth Q4 89Feb 90p
------------ Percent change at annual rates--------------------1. 2. 3.
MH M2 M3
1.8 6.9 3.9
5.1 7.1 1.8
8.2 7.8 3.8
-0.2 3.8 1.8
10.0 9.4 5.5
Levels bil. S Feb 90p
Percent change at annual rates------------
-----------
5.3 7.0 3.7
Selected components 4. 5. 6.
MI-A Currency Demand deposits
0.4
1.4
2.5
5,9
0.7
11.8
514.4
4.8 -2.8
3.9 -0.6
4.0 1.1
8.2 3.9
14.6 -10.3
10.7 12.5
226.6 280.2
-1.7
6.3
286.8
5.1
9.2
2456.0
32.1
60.9
13.4
81.6
15.5 9.5 9.4 9.6 -0.6 -0.3 -0.8
29.5 5.7 4.9 6.6 -3.0 0.7 -5.1
31.0 9.7 12.2 7.2 -2.9 7.8 -9.0
329.1 1082.4 547.7 534.7 961.8 355.3 606.5
-9.7
808.5
7.
Other checkable deposits
1.0
2.5
9.8
12.3
8.
H2 minus M12
5.9
8.7
7.7
7.7
9. 10. 11. 12.
13. 14. 15. 16.
Overnight RPs and Eurodollars, NSA General purpose and broker/dealer money market mutual fund shares Commercial banks 3 Savings deposits plus MMDAs
Small time deposits Thrift institutions 3 Savings deposits plus MMOAs Small time deposits
17. M3 minus M2
4
Large time deposits s At commercial banks, net At thrift institutions Institution-only money market mutual fund shares Term RPs, NSA Term Eurodollars, NSA
29.8 7.5 -1.7 19.0 -0.2 -9.3 5.8
37.7 7.6 3.5 11.9 3.5 -5.5 8.8
29.5 10.9 10.4 11.3 -0.9 1.9 -2.5
-1.5
-6.9
-17.3
-12.0
-6.3
-1.3 2.9 -10.6
-6.7 2.7 -28.8
-5.8 -0.3 -20.3
-9.0 -0.6 -29.8
-9.7 -5.1 -22.8
549.6 399.5 150.0
36.9 -29.8 -33.4
3.2 -49.2 -41.8
10.6 -43.0 -84.1
5.8 46.0 -58.1
103.7 94.9 70.7
17.1 -16.1 -22.5
-12.8
14.2 -138.8 15.2
Average monthly change in billions of dollars----
6
24. Managed liabilities at commercial banks (25+26) 25. Large time deposits, gross
26.
-2.5
4.2 9.9 -7.8
--MEMORANDA:
-9.2
Nondeposit funds
Net due to related foreign institutions 7 Other 28. 29. U.S. government deposits at commercial banks'
5.9 2.6 3.4
3.6 0.0 3.6
4.9 1.4 3.5
0.6 0.3 0.3
-1.4 -1.6 0.2
6.6 -2.2 8.8
725.5 460.5 265.0
0.2 3.2
1.0 2.6
-0.9 4.4
-1.4 1.6
3.2 -2.9
3.7 5.0
14.5 250.5
-0.3
-1.0
-0.6
0.7
-0.9
-2.4
17.8
27.
1. Amounts shown are from fourth quarter to fourth quarter. 2. Nontransactions 12 is seasonally adjusted as a whole. 3. Commercial bank savings deposits excluding MMDAs grew during January and February at rates of 8.9 percent and 12 percent, respectively. At thrift institutions, savings deposits excluding MMDAs grew during January and February at rates of 0 pertent and 7.6 percent, respectively. 4. The non-MZ component of M3 is seasonally adjusted as a whole. 5. Net of large denomination time deposits held by money market mutual funds and thrift institutions. 6. Dollar amounts shown under memoranda are calculated on an end-month-of-quarter basis. 7. Consists of borrowing from other than commercial banks in the form of federal funds purchased, securities for borrowed money (including borrowing from the sold under agreements to repurchase, and other liabilities Federal Reserve and unaffiliated foreign banks, loan RPs and other minor items). Data are partially estimated. 8. Consists of Treasury demand deposits and note balances at commercial banks. p - preliminary
-4COMMERCIAL BANK CREDIT AND SHORT- AND INTERMEDIATE-TERM BUSINESS CREDIT
(Percentage changes at annual rates, based on seasonally adjusted data) 1988:Q4 to 1989:04 1989:Q4
03 Q3 ---------
1.
04 Q4
Levels bil.$
1990
1989 Dec. Dec.
Jan.
Feb.
Commercial Bank Credit -- -------------------
Total loans and securities
2.
at banks
7.1
6.9
6.7
1.6
2.7
8.6
2603.5
Securities
3.9
.2
9.5
.8
16.3
20.0
592.3
9.6
4.7
16.8
-1.8
24.0
27.4
411.5
-6.8
-9.0
-5.3
6.7
-1.3
4.0
180.8
8.1
8.0
5.9
1.9
-1.2
5.3
2011.2
6.8
6.8
2.4
-6.7
-6.0
-1.7
637.2
12.8
L2.8
10.9
12.0
7.2
12.8
767.2
7.4
3.5
378.9
3.
U.S. government securities
4.
Other securities
5.
Total loans
6.
Business loans
7.
Real estate loans
8.
Consumer loans
6.2
6.6
6.2
4.8
9.
Security loans
4.1
-7.9
-3.0
-60.7
-6.1
15.3
39.7
0L.
Other loans
.8
8.0
-.6
-1.9
-32.8
.0
188.2
Sh Sh(ort- and Intermediate-Term Business Credit---------11.
12.
Business loans net of bankers acceptances 2
Loans at foreign branches Sum of lines 11 & 12
14.
Commercial paper issued by nonfinancial firms
15.
Sum of lines 13 & 14
16.
Bankers acceptances: related '
17.
6.6
-5.0
-76.9
6.3
3.3
21.0
-2.9
629.4
-47.0
22.1
-6.8
-5.7
58.5
83.7
-4.7
-2.6
-4.6
651.5
37.8
27.7
.9
137.3
31.2
14.6
9.8
5.1
5.5
2.3
2.6
-3.6
788.8
6.1
-1.1
-9.1
-3.5
3.5
31.3
33.6
4.9
4.8
2.0
2.6
-4.8
14.1
2.3
7.0
4.3.
U.S. trade
Line 15 plus bankers acceptances: U.S. trade related
18.
Finance company loans to business
19.
Total short- and intermediate-
term business credit (sum of lines 17 6 18) 1. 2. 3. 4. 5.
6.7
9.6 3
11.1
10.0.
-3.2
.9
822.4 5
-9.3
n.a.
255.8
-. 4
n.a.
1081.65
Average of Wednesdays. Loans at foreign branches are loans made to U.S. firms by foreign branches of domestically chartered banks. Based on average of data for current and preceding ends of month. Consists of acceptances that finance U.S. imports, U.S. exports, and domestic shipment and storage of goods. January data.
p--preliminary. n.a.--not available Note: Data have revised due to new seasonal adjustmant factors and benchmarking of the data to the June 30, 1989 Call Report.
-51 SELECTED FINANCIAL MARKET QUOTATIONS (percent)
1987
Oct 16
1989 2 March highs
1990 Dec lows
FOMC Feb 7
Change from:
Mar 22
Mar 89 highs
Dec 89 lows
FOMC Feb 7
Short-term rates Federal funds 3
7.59
9.85
8.45
8.23
8.27
-1.58
-.18
Treasury bills 4 3-month 6-month 1-year
6.93
7.58 7.74
9.09 9.11 9.05
7.53 7.29 7.11
7.81 7.76 7.61
7.90 7.83 7.73
-1.19 -1.28 -1.32
.37 .54 .62
.09 .07 .12
Commercial paper 1-month 3-month
7.94 8.65
10.05 10.15
8.51 8.22
8.25 8.16
8.35 8.31
-1.70 -1.84
-.16 .09
.10 .15
Large negotiable CDs 4 1-month 3-month 6-month
7.92 8.90 9.12
10.07 10.32 10.08
8.52 8.22 8.01
8.20 8.24 8.29
8.32 8.38 8.53
-1.75 -1.94 -1.55
-.20 .16 .52
Eurodollar deposits 5 1-month 3-month
8.00 9.06
10.19 10.50
8.38 8.25
8.19 8.25
8.31 8.38
-1.88 -2.12
-.07 .13
.12 .13
Bank prime rate
9.25
11.50
10.50
10.00
10.00
-1.50
-.50
.00
U.S. Treasury (constant maturity) 3-year 9.52 9.88 10-year 10.23 9.53 30-year 10.24 9.31
7.69 7.77 7.83
8.43 8.52 8.57
8.60 8.53 8.49
-1.28 -1.00 -. 82
.91 .76 .66
.17 .01 -.08
Municipal revenue (Bond Buyer)
Intermediate- and long-term rates
9.59
7.95
7.28
7.52
7.54
-.41
.26
Corporate--A utility recently offered
11.50
10.47
9.29
9.84
9.82
-.65
.53
-.02
Rome mortgage rates 7 S&L fixed-rate S&L ARM, 1-yr.
11.58 8.45
11.22 9.31
9.69 8.34
10.17 8.45
10.34 8.55
-.88 -.76
.65 .21
.17 .10
1989 Record highs
Date
Lows Jan 3
1990 FOMC Feb 7 Mar 22
Percent change from: Record highs
1989 lows
FOMC Feb 7
25.70 19.18 18.10 14.78 19.24
2.11 0.21 1.16 1.81 0.73
Stock prices Dow-Jones Industrial 2810.15 NYSE Composite 199.34 AMEX Composite 397.03 NASDAQ (OTC) 485.73 Wilshire 3523.47
1/2/90 2144.64 2640.09 2695.72 10/9/89 154.98 184.31 184.70 10/10/J9 305.24 356.35 360.48 10/9/89 378.56 426.79 434.51 10/9/89 2718.59 3218.33 3241.75
I/ One-day quotes except as noted. 2/ Last business day prior to stock market decline on Monday Oct. 19, 1987. 3/ Average for two-week reserve maintenance period closest to date shown. Last observation is average for the maintenance period ending March 21, 1990.
-4.07 -7.34 -9.21 -10.54 -8.00
4/ Secondary market. 5/ Bid rates for Eurodollar deposits at 11 a.m. London time. 6/ Based on one-day Thursday quotes and futures-market index changes. 7/ Quotes for week ending Friday closest to date shown.
INTERNATIONAL DEVELOPMENTS Prices of Exports and Imports in February Prices for imports rose slightly in February while export prices declined.
The rise in import prices was moderated by a turnaround in prices
for petroleum, which declined 1.6 percent in February following a 10.3 percent jump in January.
For non-oil imports, increases in prices were
spread among all major trade categories; most notably, prices of imported consumer goods accelerated somewhat, while the prices of imported capital goods continued to rise at a relatively rapid pace.
For exports, price
declines were especially concentrated in agricultural commodities and industrial supplies (particularly fuels).
-7IMPORT AND EXPORT PRICE MEASURES (percentage change from previous period, annual rate) Year 1989-04 1988-04
Quarters 1989 03
n72
n
(annual rates) BLS Prices - -
Imports. Total
Months 1990 Jan. Feb. (monthly rates)
Foods, Feeds, Bev. Industrial Supplies Ind Supp Ex Oil Capital Goods Automotive Products Consumer Goods
1.9 -4.7 6.2 -2.5 -0.8 -0.8 2.8
0.3 -7.2 8.5 -5.5 -4.2 -2.8 1.2
-4.6 -15.5 -14.1 -7.4 -1.2 0.0 1.2
4.8 6.5 7.4 -1.9 2.2 0.0 4.7
1.2 3.3 2.7 -1.0* 0.6 -0.4 0.4
0.2 0.9 -0.6 -0.2* 0.6 0.2 0.8
Memo: Oil Non-oil
31.5 -0.2
47.8 -3.1
-24.4 -2.8
30.8 2.9
10.3 0.2
-1.6 0.4
-0.4
-2.8
-0.4
1.1
-0.7
Exports. Total Foods, Feeds, Bev. Industrial Supplies Capital Goods Automotive Products Consumer Goods
-7.8 0.1 2.9 2.9 3.7
-11.4 0.7 2.7 1.9 1.0
-21.6 -4.6 3.0 3.0 2.8
-7.4 -2.7 2.2 5.2 2.4
Memo: Agricultural Nonagricultural
-3.7 1.3
-5.3 0.7
-15.8 -0.4
-4.9 0.4
-3.2 -1.4 0.4 0.3 0.3
1.5 1.0
- Prices in the GNP Accounts Fixed-Weight Imports, Total Oil Non-oil Exports, Total Ag. Nonag. Deflators Imports, Total
Oil Non-oil Exports, Total Ag. Nonag.
*Not for publication.
3.3 38.2 -0.6
8.0 99.4 -1.3
-8.9 -31.0 -4.9
4.0 23.5 1.3
-0.8 -7.5 0.6
2.7 -3.1 3.9
-4.1 -9.4 -2.9
-1.1 -13.8 1.7
-0.8 37.9 -4.4
0.2 100.2 -6.4
-11.1 -30.7 -7.1
2.4 22.8 -2.7
-0.8 -7.5 -0.1
-0.5 -3.1 0.0
-5.5 -9.4 -4.5
-2.2 -13.8 -1.2
-2.2 -0.4
Cite this document
Federal Reserve (1990, March 26). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19900327_part1
@misc{wtfs_greenbook_19900327_part1,
author = {Federal Reserve},
title = {Greenbook/Tealbook},
year = {1990},
month = {Mar},
howpublished = {Greenbooks, Federal Reserve},
url = {https://whenthefedspeaks.com/doc/greenbook_19900327_part1},
note = {Retrieved via When the Fed Speaks corpus}
}