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nonagricultural activities, labor force survey

• Unemployment rate, married males, spouse present

Lagging Indicators

The "lagging" indicators are a set of economic time series each of which usually reaches business cycle peaks and troughs after changes in general economic

• Unemployment rate, total* Production, Income, Consumption, and activity. Trade

• Final sales

• Gross national product in current dollars*

• Gross national product in 1958 dollars*

Index of industrial production*
Manufacturing and trade sales*

• Personal income*

• Sales of retail stores, current dollars*

• Sales of retail stores, deflated (1967 dollars)

Wage and salary income in mining, manufacturing, and construction

Fixed Capital Investment

• Backlog of capital appropriations in manufacturing

• Manufacturers' unfilled orders, durable goods industries

Prices, Costs, and Profits

Index of wholesale prices for industrial commodities

Index of wholesale prices for manufactured goods

Money and Credit

• Discount rate on new issues of 91-day Treasury bills

• Free reserves

Yield on long-term Treasury bonds

• Yield on municipal bonds, 20-bond average

• Yield on new issues of high-grade corporate bonds

Listed below are the 12 major lagging indicators classified by economic process:

Employment and Unemployment

Unemployment rate, 15 weeks and


Fixed Capital Investment

• Business expenditures for new plant and equipment, total*

• Manufacturers' machinery and equipment sales and business construction expenditures

Inventories and Inventory Investment • Manufacturers' inventories of finished goods, book value, all manufacturing industries

• Manufacturing and trade inventories, total book value*

Prices, Costs, and Profits

Index of labor cost per unit of output, total manufacturing*

• Labor cost (current dollars) per unit of gross product (1958 dollars), nonfinancial corporations

• Unit labor cost, total private economy

Money and Credit

• Bank rates on short-term business loans, 35 cities*

• Commercial and industrial loans outstanding, weekly reporting large commercial banks*

• Consumer installment debt

• Secondary market yields on FHA mortgages

These critical indicators are also combined into group (composite) indexes to provide simple summary measures of the average behavior of the groups.

The anticipations and intentions section of BCD presents so-called "subjective" data based on various opinion surveys conducted by the Department of Commerce and private institutions. Anticipations and intentions data express the expectations of businessmen and the intentions of con


In addition, BCD includes a number of other series, such as foreign trade and payments, Federal Government activities, and price movements. These series do not fall neatly into the regular cyclical indicator classifications, but they are important in the analysis of economic conditions. Various analytical ratios and diffusion indexes are also shown. Finally, consumer price, industrial production, and stock price data are shown for six other major countries in a way that permits. comparison with trends in the U.S. economy.

The terms in this part of the Dictionary are listed in alphabetical order. Detailed information on the indicator approach to economic analysis and on the particular indicators used may be found in BCD.

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Reference Turning Dates

Reference turning dates mark the months in which general business activity as a whole is judged to have reached a peak or trough. The dates have been designated by the National Bureau of Economic Research after a thorough examination of a wide variety of measures of business activity. It should be noted that reference turning dates have never been less than six months apart, and most frequently are several years separated from one another. As a matter of general practice, neither new reference turning dates, nor the shading for recessions, are entered on the charts contained in BCD until after both the new reference peak and the new reference trough bounding the shaded area have been designated. This policy is followed because of the conceptual and empirical difficulties of designating a current recession and the practical difficulties of terminating the shading of a current recession without including part of a new expansion.

The cyclical indicators framework of

analysis-the leading, coincident, and lagging indicators-assumes meaning only when considered in relation to the established reference turning dates.

Reverse Trend Adjustment of Composite Index of the Leading Indicators One unique characteristic of the leading indicators is that most of the series do not contain upward-trend movements. For instance, monthly data on the average workweek-one of the leading indicatorshas fluctuated around 40 hours within very narrow limits in the entire postwar period, seldom exceeding plus or minus 1 hour difference.

For purposes of analysis, it is desirable to have in the composite index of the leading indicators an upward-trend movement that follows closely the upward growth trend in the economy as a whole.

Thus, the composite index of the leading indicators is adjusted to include the same trend as the composite index of the coinci

dent indicators. This is accomplished by first eliminating such trend as there is in the index of the leading indicators, and then adding the trend of the index of the coincident indicators. This statistical adjustment is termed reverse trend adjustment.

The Short List of Cyclical Indicators The National Bureau of Economic Research (NBER) has developed a "short list" of cyclical indicators. This unique group of principal economic indicators is an attempt to summarize the current situation and outlook. Following an exhaustive study, the short list was drawn from the 78 cyclical indicators published by the Bureau of Economic Analysis. It now consists of 26 of the 78 series: 12 leading, 8 roughly coincident, and 6 lagging. Only 5 are quarterly series; the rest are monthly. All indicators in the short list were selected for their smoothness, prompt availability and broad coverage. The short list series are highlighted in Business Conditions Digest.

Anticipations and Intentions Data

Anticipations and intentions data provide information on the plans of businessmen and consumers regarding their economic activities in the near future. These plans are considered valuable aids to economic forecasting, either directly or as an indication of the state of confidence concerning the economic outlook. In recent years, much progress has been made in compiling such information, and a number of surveys by various private organizations and government agencies now ascertain anticipations and intentions of businessmen and consumers.

For the business sector, the Bureau of Economic Analysis conducts a quarterly survey of plans for business expenditures for new plant and equipment. The Bureau of the Census also conducts a quarterly survey of manufacturers' sales and inventory expectations.

For households, the Bureau of the Census conducts a quarterly survey on consumer buying expectations and income anticipations. The results of these surveys, as well as data from several private organizations, are published in BCD.

Book Value, Manufacturing and Trade Inventories

Book value, manufacturing and trade inventories measures the stocks on hand at the end of the month in manufacturing, merchant wholesale, and retail establishments as valued in companies' accounts. Construction, utilities, and other nonindustrial sectors are excluded.

The data for manufacturing companies represent the value of the end-of-month stocks of manufacturing establishments regardless of stage of fabrication (that is, whether in the form of purchased materials and supplies, goods in process, or finished goods). These inventories are valued at cost. Inventories associated with the nonmanufacturing activities of a company are excluded.

Inventories of the wholesale trade sector represent end-ofmonth stocks, at cost, of all merchandise owned by merchant wholesalers and available for sale. Goods held on a consignment basis and items such as fixtures, equipment, and supplies not for sale are excluded.

Data for the retail trade sector include end-of-month inventories of all establishments primarily engaged in selling merchandise for household consumption, valued at the cost of merchandise on hand.

This series, measuring monthly movements in inventories, is essentially compatible with the GNP series on business inventories, except that the manufacturing and trade series measures the change in the dollar value of inventories while the GNP series measures the dollar value of the change in physical volume of inventories. The two series differ somewhat when prices of goods held in inventory are rising or falling significantly.

See also Change in business inventories, p. 17.

Business Expenditures for New Plant and Equipment

The series on expenditures for new plant and equipmentcompiled by the Bureau of Economic Analysis (BEA)-measures expenditures by all private business (except farming, real estate, the professions, and nonprofit and other institutions) for new plant, machinery, and equipment.

Figures are compiled quarterly for actual plant and equipment expenditures and for anticipated expenditures for the next two quarters and the current calendar year. The basic data are derived from reports submitted to the BEA by a large sample of companies and by companies under ICC jurisdiction.

New plant and equipment expenditures refer to all costs (both replacement and expansion) chargeable to fixed asset accounts and for which depreciation accounts are ordinarily maintained. Included in the totals are expenditures for new construction, machinery, and new equipment (automobiles, trucks, and other transport equipment). The quarterly estimates do not include expenditures for land and mineral rights, maintenance and repair, and expenditures made in foreign countries.

Consumer Buying Expectations

Individual consumers usually have some plans as to their major economic activities in the near future, though they are typically not as precise nor as firm as business plans. The Bureau of the Census conducts a quarterly survey of consumer expectations which measures actual and anticipated household spending on houses, cars, and other major durables. Survey information is collected from approximately 11,500 households selected from a larger sample of 16,000 households throughout the United States.

In each survey, households are asked about their durable goods purchases during the preceding three months and their expected purchases during the next 6, 12, and 24 months. In addition, questions about recent changes in income and income expectations are asked.

The detailed results of this survey are published quarterly in the Bureau of the Census publication Consumer Buying Indicators. Summary results appear in Business Conditions Digest.

General Imports

General imports are reported as the dollar volume of total arrivals of imported goods, exclusive of in-transit shipments. They include all merchandise released from Customs custody immediately upon arrival and merchandise entered into bonded storage warehouses, bonded manufacturing warehouses, and bonded smelting and refining warehouses immediately upon arrival. The dollar value is defined generally as the market value in the foreign country and therefore excludes U.S. import duties, freight charges from the foreign country to the United States, and insurance. This method of accounting is frequently referred to as f.o.b. (free on board).

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