greenbooks · August 23, 1999

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.

In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing). 2 A two-step process was used. An advanced optimal character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff.

CONFIDENTIAL (FR) CLASS III - FOMC

August 20, 1999

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

THE INTERNATIONAL ECONOMY Trade in Goods and Services ................

Page .........................

Tables U.S. Exports and Imports of Goods and Services ..........................

Charts U.S. International Trade in Goods and Services ...........................

THE FINANCIAL ECONOMY Tables Selected Financial M arket Quotations ...................................

Commercial Bank Credit ...........................................

SUPPLEMENTAL NOTES

U.S. International Transactions Trade in Goods and Services In June, the nominal U.S. trade deficit in goods and services was $24.6 billion, considerably larger than the deficit in May. For the second quarter, the deficit was $258 billion at a seasonally adjusted annual rate, $43 billion larger than in the first quarter. Net Trade in Goods & Services (Billions of dollars,seasonally adjusted)

1998

Annual rate 1999

Monthly rate 1999

1998 Q4

April

May

June

Real NIPA' Net exports of G&S

-238 2

-250 0

-303 6

-323.0

--- --- --- Nominal BOP Net exports of G&S Goods, net Services, net

-164 3 -246 9 82 6

-173 0 -254 3 81 3

-2150 -296 8 81 8

-257.5 -338.6 81 1

-186 -25 3 67

-21 2 -27 9 67

-246 -31 4 68

1 Billions of chained (1992) dollars Source U S Department of Commerce Bureaus of Economic Analysis and Census n a Not available --- Not applicable

The value of exports rose 1/2 percent in June, with small increases primarily in automotive products and service receipts. For the second quarter, the value of exports rose 1.1 percent over the first quarter level, nearly returning to the peak levels recorded in the fourth quarter of last year. Increases in the second quarter were spread among several major trade categories, including automotive products (mostly to Canada and Mexico), industrial supplies (especially fuels), computers, semiconductors, and service receipts. Exports of agricultural products rose moderately in the second quarter, while exports of aircraft declined sharply for the second consecutive quarter. The value of imports rose 3.9 percent in June, marking the second consecutive month of strong increases. Imports rose in all major trade

-2-

categories, with particularly strong rates of increase in capital goods, automotive products, and consumer goods. For the second quarter, imports were 4.6 percent above the first-quarter level, as all major trade categories registered increases. Much of the increase was in oil as the effects of sharply higher prices were augmented by a modest increase in quantity. Sizable rates of increase were also recorded for imports of computers, semiconductors, and industrial supplies (especially building materials).

-3-

U.S. International Trade in Goods and Services

Net

Fxports

Contribunon ol \il _

Bil$ S\R

to RL.Il I)P'C(jrouih Pcrcentaiec oint, S\R

\port,

- 40O

BOP / bas,

S 120

I 1991

I I 1993

I I 1995

3 -4

I I 1997

160

1999

Bil$. SAAR Net trade in computers and semiconductors

- 200

___----------

S240

Net automotive trade Swith Canada and M xico

-280 I

1991 -

1991

I 1993

I I I60

1995

1997

1999

Selected Imports

Bil$ SAAR 240

320

1993

1997

1999

;elected Exports

B11

200

180

160

-o

120

100

S-

Consumer good

M1 ichiner) 2/

S0Industri I I/ suppl

220

S-\R

180

160

140

-120

Industrial

Mahiner

100

supplies I/

Consumer goods

-__0

f\Automotie

- 80

I/ (overseas)

\irraft

S20

199 1

I99O

1991

199

I Excludes agrilulturL and gold 2 Excludes compulcrs and semiconductors

1999

1991

q93

199q

I Excludes oil and gold 2 Exlude ters and 2 Excludes computers and

sct.nondu.tors

" Excludes Canada and MLxILO

11 40 199

U.S. Exports and Imports of Goods and Services (Billions of dollars, SAAR, BOP basis) Levels 1999

1999 June May 9355 940 4

Amount Change' 1999 1999 QI Q2 May June -192 98 -3 2 50 -23 -7 -4 -12

Exports of G&S

Q1 9284

Q2 9382

Goods exports Agricultural Gold Other goods

657 2 47 3 29 607 0

662 49 3 610

7 3 3 1

661 5 49 2 20 6102

663 4 50 4 39 609 1

566 44.1 42 1 158 8

48 46 45 159

6 4 2 1

48 1 46 7 45 2 1594

714 42 7 103 184

75 1 446 114 19 1

126 1 796 28 2

271 2

Aircraft & pts Computers Semiconductors Other cap gds Automotive to Canada to Mexico to ROW Ind supplies Consumer goods All other Services exports

3 0 2 1

55 19 05 31

46 0 46 8 45.3 159.0

-7 0 -14 25 -16

-80 22 31 03

730 44 4 115 17 2

78.1 46.8 11.4 20.0

-3 3 -10 -17 -0 7

36 19 11 06

129 8 79 1 26 9

130 9 780 28 8

130.5 78.6 24.8

-36 04 19

37 -04 -13

27 -28 56

-04 06 -4 1

2755

2740

277.0

-15

Imports of G&S

11434 11957

11895 1235.9

228

523

27 7

464

Goods imports Petroleum Gold Other goods

9540 1001 3 424 64 5 32 3 2 908 4 933 6

9962 1040.4 67 9 69 8 30 3.3 925 4 967.3

19 1 -34 -3 3 25 9

47.3 222 -0 1 25 2

29 0 120 -0 2 17 2

441 19 03 41 9

04 45 39 37

10 13 24 63

06 51 0 1 90

Aircraft & pts Computers Semiconductors Other cap gds

77 6 334 145 9

226 820 37 3 149 7

22 80 38 148

7 8 1 8

23.3 85.9 38.2 157 7

-2 1 29 15 26

Automotive from Canada from Mexico from ROW

171 6 65 1 30 9 756

1750 62 6 33 3 79 2

175 1 63 4 343 77 3

185 5 64.5 34.4 86.7

104 70 03 31

106 35 32 38

Ind supplies Consumer goods Foods All other

142 2 229 1 417 44 6

146 232 43 44

144 226 43 44

8 9 6 6

148.5 237.8 45 1 45 3

-0 9 82 01 32

-0 2 -5 3 10 01

1894

1944

193 2

195 5

-13

11 21 1039

1201 1468

12 17 1528

1265 15 10

020 -099

081 429

094 164

048 -0 18

Services imports Memo Oil qty (mb/d) Oil prce ($/bbl)

22 2

1 3 8 8

1 Change from previous quartei or month Source U S Department of Commerce Bureaus of Economic Analysis and Census

-5-

Selected Financial Market Quotations (One-day quotes in percent except as noted) 1998

Change to Aug 19 from selected dates (percentage points)

1999

FOMC* June 30

Oct 15

Dec 31

FOMC* June 30

Aug 19

Oct 15

Short-term Federal funds FOMC intended rate Realized rate

500 5 40

475 458

475 472

500 5 02

00 38

25 44

25 30

Treasury bills 2 3-month 6-month 1-year

405 4 12 406

437 439 433

470 492 489

462 487 490

57 75 84

25 48 57

-08 05 01

Commercial paper I-month 3-month

527 5 13

490 484

518 5 12

5 18 527

09 14

28 43

00 15

Large negotiable CDs 2 I-month 3-month 6-month

535 5 31 510

501 497 497

521 5 32 543

529 543 5 87

-06 12 77

28 46 90

08 11 44

Eurodollar deposits 3 I-month 3-month

5 34 528

494 494

513 525

5 25 544

09 16

31 50

12 19

Bank pnme rate

825

775

800

Intermediate- and long term U S Treasury (constant matunty) 2-year 10-year 30-year

4 13 458 502

454 465 509

568 593 607

566 590 603

I 53 1 32 101

I 12 125 94

-02 -03 04

U S Treasury 10-year indexed note

369

388

401

402

Municipal revenue (Bond Buyer)4

5 21

5 26

562

5 86

Corporate bonds Moody's seasoned Baa

7 26

7 23

805

8 13

11 28

10 17

1053

1084

-44

649 5 6

677 558

763 593

8 15 624

166 88

I 38 66

52 31

Instrument

High-yield corporate ' Home mortgages (FHLMC survey rate) 6 30-year fixed I year adjustable

Record high

1998

Dow-Jones Industrial S&P 500 Composite Nasdaq (OTC) Russell 2000 Wilshire 5000

Change to Aug 19 from selected dates (percent)

1999

Level

Date

Dec 31

FOMC* June 30

Aug 19

11,20984 141878 2.86448 491 41 12,97699

7-1699 7-16-99 7 16-99 4-21-98 7 16-99

9 181 43 I 22923 2.19269 421 96 11,317 59

10.815 35 1.351 45 2.642 11 45408 12.37795

1096384 1,32359 2,621 43 43277 12,06050

Stock exchange index

Dec 31

1 Average for two-week reserve maintenance period ending on or before date shown Most recent observation is average for current maintenance period to date 2 Secondary market 3 Bid rates for Eurodollar deposits collected around 9 30 a m Eastern time 4 Most recent Thursday quote 5 Memll Lynch 175 high-yield bond index composite 6 For week ending Friday previous to date shown * Data are as of the close on June 29, 1999

Record high -2 19 671 848 11 93 -706

Dec 31 1941 768 19 55 256 656

FOMC* June 30 1 37 -206 78 -469 -2 56

Commercial Bank Credit (Percent change, seasonally adjusted annual rate)

1999 Type of credit

1998

1999

May

Jun

Level,

Jul

Jul 1999 (billions of $)

1. Bank credit: Reported

110

-03

-05

-1 2

4,534

Adjusted1

103

2.0

11 0

4.461

Securities: Reported

14 I

-6 I

-3 7

-1 1

175

163

1.221

Adjusted'

11 2

2 1

269

225

1.148

U.S government

4 1

-27

209

816

Other2

Loans 3

Business

Real estate

324

-245

-193

105

389

405

-75

3.313

11 9

-64

I I

959

1,355

10.

Home equity

0 1

-24

12 1

-84

-662

11.

Other

1.261

-1 5

-36

-103

-120

-204

485

-55

760

30 1

-127

-44

200

245

-322

515

12.

Consumer. Reported Adjusted 4

13. 14.

Other 5

Note Adjusted for breaks caused by reclassifications Monthly leels are pro rata alerages of weeklv (Wednesday) levels Quarterly levels (not shown) are simple averages of monthly levels Annual levels (not shown) are levels for the fourth quarter Growth rates shown are percentage changes in consecutive levels annualized but not compounded I Adjusted to remove effects of mark-to-market accounting rules (FIN 19 and FASB Is) 2 Includes secunties of corporations state and local governments and foreign governments and any trading account assets that are not U S gov emment securities 3 Excludes interbank loans 4 Includes an estimate of outstanding loans secuntized by commercial banks 5 Includes secunty loans loans to farmers state and local governments and all others not elsewhere classified Also includes lease financing receivables

Cite this document

APA

Federal Reserve (1999, August 23). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19990824_part1

BibTeX

@misc{wtfs_greenbook_19990824_part1,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1999},
  month = {Aug},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19990824_part1},
  note = {Retrieved via When the Fed Speaks corpus}
}