MARCH 1959



Aye S56 aa ps.

A i>

2 lel




MARCH 1959


Payments Excess in International Trade Continues High.

Exports Remain Low


Busines [a icturing Programs.. ranufacturing Industries ition of 1958 Programs les Anticipations.. Consun

Consumption Patterns.

mption-Income Relations


Statistical Index

Purchasing and Income Patterns.

inticipations of 1959 Investment and Sales....

. 5-1 to S—40 ..+++imside back cover

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MARCH 1959

The VE ; S:; USstnheESS thuation

By the Office of Business Economics

Business expects some recovery in CAPITAL OUTLAYS in 1959...

Billion Dollars



oo > he Me



1953 54 55

but large SALES increases

Percent Change


1958-59" Z

1957-58 actual



mmerce, Office of Business Economics

. : ;CONOMIC activity has continued to expand under th« impetus of high consumer buying, a shift from inventory liquidation to restocking by business firms, and higher investment in both residential construction and industrial plant and equipment. National output has been larger in the first quarter, as the high rate of activity reached at vearend was sustained or extended. The recovery in GNP in the past year has been largely in real terms and the volume of current output represents a new record for the economy, appreciably in excess of the cyclical high reached in the summer of 1957.

Employment has not changed much in the midwintet months, aside from the usual seasonal variations. As com pared with the corresponding period of a year ago, both higher employment and longer hours of work have con tributed to the enlarged output. New work force require ments have not matched the gain in output-——-a phenomenon typical of the earlier phase recovery periods—-so that while unemployment has been reduced, the drop-off has not been at a rate commensurate with the expansion of activity

Purchasing power has continued to rise. Personal income in February was at an annual rate of $364% billion, up $1 billion from January, and $5 billion above the rate for the fourth quarter. It was $12% billion, or 3% percent, abov the previous high of the summer of 1957. The major part of the expansion of incomes in the past year reflected a gain In real buying power as consumer prices were up less than 1 percent.

Wages and salaries, which make up by far the major share of the total, accounted for most of the gain in income over the past vear. This stemmed from increases in employment and hours worked, and from a continuing trend to higher pay scales

Corporate profits—which are reflected im the personal income flow only to the extent of dividend disbursements are up sharply This national mcome component is espe cially volatile, shrinking sharply m recessions and rebounding in the same fashion as business improves. The lag in the availability of basic data makes impossible the calculation of corporate profits estimates with the same currency as thi other income flows, but it is clear that the advance in profits is contmuing

Consumer buying advances

As brought out in the article im this msue the cor slimmer has been a prime factor in the business recovery, just as he had been a sustaining influence in the preceding recession Retail sales in January and February were at a seasonally adjusted monthly rate of S17 billion, 2 percent above the fourth quarter average and 7 percent above a year ago

The fourth-to-first quarter gain in sales reflects mainte-


nance of the nignelr volume of purchasing reached in the

Kaster sales re ports, for example, record il March

are being purchased at

final months of 1958. Pre point to a continumng cood Most of the rates above a year ago autos have been selling at al million, compares volume of 4 An important feature of thi years has been the « x pande a uli ot foreign cars far this year are at an an ial rate total of 375.000. Only were 30.000 Demand for oth well

muior consumel line Domestically produced new model eXCeCSS of 5 1958

annual rate in

with a million in automobile m cet in recent Sales so well above last year’s imports ol foreign cars

sumer goods

acuivily is

has been

Sustamed LI

Shipments and New Orders Durable-Goods Manufacturers Major advance in steel

Billion Dollars Billion Dollars i 7 Iron and Steel industrial Machinery


Fabricated Metals

Transportation Equipment Electrical Machinery

Except Mot

| | 2 |


woo S37 58 59 1956 57 58 Monthly Totals, Seasonally Adjusted

U. S. Deportment

and building materials producers at the

March 1959

serving to support purchases of large ticket home items, such as furniture and appliances. Demand for soft goods, which was generally maintained during the downswing in activity has moved well ahead of the prerecession level ,

Business investment higher

for fixed and working capital has firmed con- siderably in recent months. As reported in our regular annual survey in this issue, business expects to install a moderately higher volume of plant and equipment in 1959.

The quarterly pattern of fixed capital outlays indicates that the modest turnaround in such spending took place in the final months of last year, and in the current quarter outlays are scheduled to be about $1% billion, or 4 percent, above the fourth quarter annual rate

Nonfarm residential building activity has been one of the Construction


major expansionary forces in the economy) put m place this quarter is expected to be at an annual rate of around $22 billion—higher than in the fourth quarter, and very considerably above the volume a@ year ago Private housing starts, which lead activity by several months, have been running at an annual rate of better than 1 million units since last October; this compares with starts of around 900,000 a year ago.

I ‘actory stocks rise

shift in business investment programs While part ol t dollar in- creases represents highet replacem« nt cos he major share consists of additions to goods on hand Thu ventory 1n- vestment 1s currently adding to output in to early 1958 when final demand was being partly m v a drawing stocks At the end of January still $4 billion under the year-ago total TI tion and improved sales have lowered t! months at the end of Janu: 198 |} The latter ratio

The mayor recent


has been in inventories

ISINeSS stocks

down ol

Weer’ is reduc-


ratio from 1.7

months this January |

cOFe mid-1955


ntrated in indus-

Che early manufacturing, pri

S SLOG ks ot

1959 inventory Investment we cipally in the metal nonelectrical machinery ] s and of vehicle, electrical machine! and metais Nar tion equipment industries had contir rth December: the

tie motol vroups

vere uD segments of the mac! and transporta-

! ity lida- 1O! throug two gi ips nted fol vroods



billion reduct

Stocks hel

practically all of the $2

ventories ove! tiie



in most nondurable goods ind noderately

nur-ago hgures, about

and among food beverage comp: ( t! ig]

with those of pa

Thi ad

huary rise ih nondurabl

food il

(OOS iemical industries the d and nondurabl s grou] put

aterial were lnmcreases i 1 lor the

InterruptLor recent downtre oods

held by

several months of

coods produce! Os l ur stability |

Cre broaden Yr OL Zoot

irre d ve part, ment

primary metal companies


l trial


re flecting the ri

Irhnaround inventory poli yar the

Ol siderable Strength im residential Dul iodest

ncKup in other tixed investment has parent npact oO! coods

es, and

acurvily steel out if and automobile


more particularly in

March 1959 SURVEY OF assemblies. Steel production reached a new peak in mid- March with the industry operating at better than 90 percent of capacity. No doubt a considerable factor in this picture is the restocking of steel by users of that metal. These stocks had been drawn down substantially during the recession and early recovery phase of the cycle. However, also of importance in the steel demand situation is the forward buying now going on, occasioned by the possibility of higher prices or a work stoppage later in the year. Automobile production has also been notably in excess of consumer demand for the past several months as manu- facturers sought to refill dealer showrooms with new models Some production schedules were curtailed in earlier months by work stoppages on important component parts, but with the recent settlement of the strike in the glass industry full production is once again possible. Currently, dealer inven- approaching desired levels and production may be

tories are into line with sales to consumers and

expected to move business users Total manufacturing activity was tilting upward in the first quarter. The pace of the recovery in factory output was most rapid last summer and early fall, and in the last several months moderating tendencies were in evidence

Foreign demand

nal markets have not been supplying any major influence to the economy. Export demand was in 1958 and thus far in 1959 there is no indi- As shown in a following there has

Internatio stimulat off moderately cation of any significant change. section which reviews international transactions, been a marked shift in our trade position.

Government purchases up

ment purchases of goods and services appear to be current quarter, principally reflecting e and local governments. Federal following closely the in the

Gover! up somewhat 1n the a further increase by Stat has tended to flatten out ticipated in the Budget presentation early last month’s SURVEY.

Govern! responding to the pickup in profits and other income. Again the revenue picture emerging to this point is in line projections which involve a considerable narrowing of the Federal deficit.

purchasing pattern

year, ana rr ewed substantial as in the case

revenues are

ol expel aitures

Prices stable

The general wholesale price average so far this vear has

unchanged from a vear ago, and the consumer

ntinues to fluctuate within a narrow range. prices rose to new peaks in early 1959, the

been virt price ind¢ Stoc! February being about percent above third above a yea

average [tor January that tl! yurth quarter and almost one

ields remain close to their postwar lows, the changed recently with rising fall-off in profits

flow of d ds not having profits s they did not drop with during the recessio1

The mo authorities early in March increased the dis- count rat borrowing from the Federal Re- serve third such action taken since early last fall, and the current rate charged by the New York bank is no percent compared with the low of 1% percent in Long-term U.S. bond yields reached 4 new high for the postwar period, and

t percentage point above a year ago.

.?¢ d on bank

Svste This was the

ths ol

porat long -term bonds have not changed ap-

last fall and are currently about one-half of a above a year ago.



Manufacturers’ sales and orders

The rise in manufacturers’ sales and new orders has con- tinued into early 1959—although the most recent figures show some slackening in the rate of gain as compared with earlier months of recovery. Incoming orders in January were one-sixth above a year earlier, and just 5 percent off the late 1956 peak. All major industries were receiving orders in January well above year-earlier rates

Steel activity expands

January witnessed a sharp spurt in the ordering of iron and steel products (see chart) and a more moderate advance for nonferrous metals. In steel, incoming business expanded by a third over the December seasonally adjusted rate. This increase on top of the rapid acceleration in steel buying during 1958 brought the January total to a record in terms of both dollars and volume.

Backlogs on the books of iron and steel producers ad- vanced sharply to bring the end-of—January aggregate well above a year ago.

In fabricated metals, including structural products, heat- ing and plumbing equipment, and builders hardware, there was some expansion in sales and orders during January but on a more moderate scale than in the iron and steel industry Backlogs-sales ratios were still well below year-ago rates

Machinery orders up moderately

The nonelectrical machinery group, which had shown the smallest from early 1958 troughs of any major hard goods industry, reported an increase in the seasonally adjusted rate of deliveries for the opening month of 1959 The flow of new orders group advanced nearly 10 percent. The bulk of the rise occurred among companies producing agricultural, construction, mining, and office and store equipment. The unfilled orders rise in January for all nonelectrical machinery companies held the backlog-sales ratio over the month relatively unchanged following a considerable decline.

In electrical machinery, sales showed little change in Janu ary, While orders and backlogs edged off. This industry re- acted only moderately to the recent recession and has since shown strength The backlog sales ratio for the electrical machinery group is close to that of a year ago primarily on the performance of companies i the radio-electronics communications field


to the

Divergence in transportation equipment

Activity in nonautomotive transportation in recent months has reflected divergent

In the dominant

{ among component mn sales of commercial

tantially whereas de

movemel clustries aircraft area iL tplanes and ol missiles have risen s ib liveries of military aircraft have declined

Sales and backlogs of unfilled orders have been improving her types of transporta although January figures were still well be- Trends in this industry reflect the turn companies

in recent months for produ ers ot ot tion equipment, low year-ago rates up im nmvestment programs ol transportation reported elsewhere in this SURVEY

Sales of at ndurable erate but rather steady upturn cent them recession low The yroups have recorded the largest relative im part reflecting their sharper previous declines. During January there was further rise in deliveries by these industries. The paper and chemical industries reached new sales records in the late fall and early but January little

coods produce have shown il mod and in January were 10 per- above petroleum and textile

improvements SoOTnEC


deliveries were off

Payments Excess in International Business

Continues High

UNITED States international payments exceeded receipts by nearly $800 milli in th I f 1958 resulting in a corre pol a d dollar hold- taken by

ings About > was ke pt

foreign countrir

in various fort Total net p

i(wo precedit

oy the to the annual service ember and to various other for seasonal factors, net payment were | nore thal during the earlier part of r $4 billion at ar annual rate)

For 1958 as a whol het pay nt wel about billion, of W hie ! é bill

Although « Ler! trans? I Luring 1958 resulted in a nts aite! allowance for trend after the and payments wel i

Recorded payme! { I is irom 3 lnira $25.8 billion in the first quarter 98 to about $27.6 billion in the last quarte! The latt uid Hay 1a new high except for certal cial transact 3 Ww! aised payments during the billion. (Large loans and investments in ol mes ns i eZUE about $1.4 billion at 3 annus at to our payments at that time.)

Recorded ree


a Tising receipts recession

( ol about

vuarter oO 7 tt ea ite of S285

ol le I ad lease


la added

payments, from an annual rate quartel ol

Table 1.—U.S. Balance of Payments Seasonally Adjusted (Exclud- ing Military Grant Aid)

U.S. payments, total Impor tot

US. receipts, total Export t



1 ' Errors and omission Increase in foreign gol«

through = transactic States

1958 to $23.6 billion in the last quarter. This was about $1.8 billioft under the rate a year earlier and $4.5 billion below the recent peak rate of $28.1 billion in the first quartet: of 1957 (which was unusually high, however, because of many extraordinary transactions

As the vear progressed, the rise in recorded rec ipts sea- gradually approached the rise in recorded inter-

sonally adjusted payments, and in the last quarter both sid national accounts increased by about the same amount

if continued, 1 | { that

While this development, national

the highest point in the net payments o1 transactions has been reached, and that the balance on our foreign transactions from now on will gradually improve,

such a conclusion may still be premature Special and

may have affected recent trans-

possibly temporary factors to rather different

actions; the rise in payments was duc

types of transactions from the rise in recé pts

Imports rise to new high

Merchandise imports advanced from the first to the fo irth quarter by $2.1 billion at an annual rate, and other purchases by $600 million Most important among the latter were military expenditures which reached a peak in the third quarter (due to large payments on construction contracts but came down somewhat in the fourth. The rise in the outflow of funds through higher purchases abroad was, in part, offset, however, by a moderate decli in the net out flow of private capital

Merchandise Imports, which after seasonal adjustme advanced from the first to the second quarter and remained

nt, had

at the higher level during the third quarter, ros sharply during the last quarter of the vear After having been below the previous peak annual rat ' $13.4 billion reached in the latter half of 1957, for a ps 1 of about a vear, merchandise imports passed the earlier high and ad vanced to a rate of $13.8 billion per year in the last 3 months ol 1958

‘| he large Veur-el

about $12.9 billion


id Increase brought ti total oO! G58 to less than $200 mil percent

omitting the sp mports

bye low the previous year mentioned earlie!

The 1957-58 decline was considerably the previous high considerably fast

; 4 recessio! At that time \ % quarters before the previous pea as during the larters although prices were declining that the fourth quarter 1958 figure

more recent reces

March 1959

accumulation of transactions so that a relapse may still occur in the early part of this year.

The most recent rise in imports can be attributed only in part to the recovery in industrial production.

The major raw materials which were imported in larger volume in the last quarter of 1958 than during the cor- responding period of 1957 were wool, sawmill products, and wood pulp. The rise of $32 million in these imports re- flected mainly the higher activity in residential construction and in the woolen textile and paper industries.

Of the major metals and metal ores, imports of copper rose by nearly one-third from the third to the fourth quarter of 1958, but were still less than in the last quarter of 1957. However, relatively low inventories and a firming of prices which continued into 1959 suggest that the fourth quarter more than seasonal advance. Nickel imports dropped off sharply from the third quarter because of strikes in Canada. Only tin imports were slightly higher in the fourth than in the previous quarter and a year earlier. Imports of iron ore, manganese, tungsten, lead, zine, and bauxite were less than a year ago, although for some of these metals imports rose slightly from the third to the fourth quarte!

In the aggregate, imports of metal ores and refined metals during the fourth quarter of 1958 were about $20 million less than in the third, and about $80 million lower than in the last quarter of 1957. With allowance for seasonal factors and the interruption in nickel production, it seems that the drop in such imports was halted in the fourth quarter, but that any recovery was very slight and selective.

Of other major raw materials, imports of rubber rose considerably in the fourth quarter of 1958, but still remained smaller than a year earlier; imports of hides, skins, and furs were up from the last quarter of 1957.

Although imports of raw materials at the end of 1958 did not quite reflect the increase in industrial production, it may be recalled that the effects on imports of the downswing in production during 1957 were also delayed by many months during which large inventories were accumulated. Also, in the case of many commodities the impact of the decline in demand was greater on domestic production than on imports and it may be expected, therefore, that the upswing in demand would stimulate domestic output more than imports.

The recent rise in imports appears to have been due mainly to higher purchases of commodities other than raw materials. some ol hese increases may be due to special, temporary factors, and some to more basic trends not related to cyclical

rise constitutes a

factors Petroleum $50 million

imports in the fourth quarter of 1958 were up from the previous quarter and by the same last quarter of 1957. Much of the rise

December and appears to have been

amount from the which ( I n slightly than seasonal, was perhaps due to accelerated buying

in Maré Import

nticipation of mandatory quotas imposed early

meat products cattle, and fish were about $50 million a year earlier, but only slightly more than in the rd quarter of 1958. The rise in import demand for these products which started in the latter part of 1957 Cocoa imports were up


apparel tl lost most of its force. million over the third quarter, and $9 million quarter of 1957— reflecting relatively low in

the earlier part of 1958. Sugar imports dropped than usual from the third to the fourth quar- well above the fourth quarter of 1957 The i earlier in the vear and the decline in Puerto on were responsible for most of the import rise

by about

fourth quarter of 1958 were

pts during the Most of the change was in

than a year earlier.


prices which declined from 47 cents to 40 cents a pound The volume was about 3 percent less than in the last quartet of 1957, when it was relatively high to make up for post- poned imports earlier in that year and to replenish inven- tories. At the end of 1958 a comparable increase in stocks did not take place. In fact, yearend stocks were the lowest since 1954. Thus, the volume of imports in 1959 will have to be maintained even to meet current consumption require ments. The continued decline in prices, however, may hold down the value of imports

Total foodstuff rose somewhat more than seasonally from the third to the fourth quarter of 1958 and thus contributed to the overall rise in seasonally adjusted imports. However, at least part of this rise appears to have been due to tem porary factors.

Most of the upswing in total imports may be attributed to higher purchases of machinery and vehicles, iron and steel mill products, other durable producers and consumer goods, and gem diamonds. Imports of these commodities were up about $150 million, or one-third, from the corresponding quarter of 1957—by about the same amount as total met chandise imports. in part this may be attributed to the rise in incomes and consumer expenditures and, as in the case of the higher steel imports and capital goods, to larger business expenditures. To some extent, however, the in crease reflects changes in domestic consumer preferences, and in the competitive position of foreign products. These changes became evident earlier but were intensified last year and are largely independent of the cyclical upswing.

Summing up these various trends, it appears that a decline may be anticipated in imports which were temporarily en larged by special factors, particularly those of petroleum and certain foodstuffs. The downward trend in coffee prices may also result in lower import values. These declining tendencies may be more than offset by the upward trend in imports of manufactured goods which so far has not shown a tendency to flatten out, and by some rise in lagging imports of raw materials for durable goods industries. The result, however, will be a slower rise than at the end of last year

Diverse trends in capital outflow

The aggregate net outflow of private capital during 1958 was about $2.9 billion, only $300 million less than in 1957. The composition, however, changed considerably. Direct investments fell from $2.1 billion to about $1.1 billion, while other capital outflows increased from $1.1 billion to $1.8 billion.

The $1 billion drop in new direct investments affected primarily the petroleum and manufacturing industries. The decline in petroleum investments— from about $1.3 billion in 1957 to approximately $600 million in 1958—-was in part due to the lack of large new cash outlays such as the purchases of oil concessions in Venezuela, which in 1957 absorbed about $360 million. The completion of major pipeline projects in Canada was another factor in the decline

Capital outflows to manufacturing enterprises which in 1957 amounted to $370 million were reduced by about one half in 1958. A large part of the decline was due to lesset capital requirements in the aluminum industry which ob tained relatively large amounts of new capital in 1957

These declines affected mainly Latin Ame rica, where direct mostly in the petroleum industry—dropped by $700 million, and Canada where they were $230 million less Net capital outflows through direct investments to Kurope were moderately lower and to Asia and Africa slightly highet

The decline of new direct investments from the previous


high occurred largely toward the end of 1957 when industrial

Although much


expansion Was falling off in manv countries


March 1959 Table 2.—t

.S. Balance of Payments by Areas—

Western European dependen

IT | Ulrr {ty

Exports of goods and services a5, Cf oS 092 5 78 2,015 2 total

, 223 1, 880 2, 160

Military transfers under f 5 5 5 487 4101 grants, net, total

Other goods and services % , O75 5. 5 5 > } 6,791 1,614 1 total

Merchand lodir


10 Direct

I! Other priva

12 Government

13 | Imports of goods and services tota

4 Merchand cluding 1

Government Balance on goods and services ota Excluding military transfers Unilateral transfers, net

foreign countries


Excluding military trans fers

71 491 153| 216 Private remittance Government Military ery ice Other grant Pen transfer

U.S. capital, net [outflow of funds . total Private, net, total

Direct ir

New is


Other lor

hort-tert et Government, net, total




Foreign capital, net [outflow of funds total Direct and

folio in than | ecuritie

Transact ernmer hort-term eign t tution

Other short-te


Gold sales (purchases the United States

47 | Foreign capita

48 | Errors and omissions and transfers of funds between foreign areas ([receipta by foreign areas net


1} Increase tr

| foreign g

| liquid de

2 Through «

* Revised » Pre 1. Reported gold 2. Equals baiance individual area

March 1959

1957 Annual;


1958 Annual, and by Quarters

Latin American republ


[Millions of dollars]

All other countries

Year? |

International institutions

1, 469


, 445

, 059

163 118 176 ~ 535 —s4

1, 469



| 1, 039


® 5


f 119



—210; —1600

5, 375|

3, 954)

466 34}

191 85


515 3s 31

5,509, 1, 397)



4, 563) 3, 169


represents gold obtained by foreign countries outside the United

of Commerce, Office of Business Economics

lable 3.—U.S


Balance of Payments with the Sterling Aream—1957 Annual; 1958

Annual, and by Quarters

Exports of ATilit

Other goods anc

Mf r

Imports of goods and services, total Mor

Balance on goods anc Total Excluding military

transfers foreig:

Unilateral untries rot Excluding military transfers |

U.S. capital, net total Private, net

Dir t


Covernment, net, total |

Foreign capital funds


Cold United Stat

sales (purchases

Foreign capital and

nss nes

11 116

ness; nss nss nse 63 lf 15 16


nse M4







March 1959

smaller than in the previous year, direct investments within the year 1958 were rather stable, and in the last quarter were even slightly higher than a year earlier.

Other capital outflows, particularly new issues of foreign securities, were at a postwar record, but reached their high point during the first half of 1958 and fell off during the latter part of the year. Although there was some revival of new issues during the last quarter of the year, partly in conform- ance with the usual seasonal pattern, the broad trend re- flected the changes in the capital market from relatively favorable conditions early in the year to a tighter money sup- ply and higher interest rates during the second half.

The net outflow of funds through medium- and short-term credits showed a somewhat similar pattern. Such loans reached a peak in the last quarter of 1957, stayed rather high through the second quarter of 1958, and then dropped sharply during the second half of the year. In the last quarter of 1958, the net outflow of such funds was down to $34 million, compared with $212 million a year earlier.

The tightening of the capital market and rise of interest rates, which in itself discourages borrowing, was also in con- trast to the relative expansion of available capital and the decline in interest rates in certain parts of Europe. These tendencies continued into 1959. As long as these conditions prevail, the outflow of capital from the United States through new issues of bonds or loans is likely to remain comparatively low

In contrast to these forms of capital movements, the out- flow of funds through purchases of outstanding foreign secu- mainly stocks, increased steadily during 1958. Pur- chases of foreign stocks were stimulated by their higher vields compared with domestic stocks, and by the desire of nvestors to diversify their portfolio. During the last quarter of 1958 recorded net purchases of foreign stocks were over $90 million. A further increase of investments in European stocks was reported for January.

The net outflow of funds through Government grants and capital transactions in 1958 was almost the same as in the preceding year. The net accumulation of foreign cur- rencies through the sale of agricultural products declined during the vear and changed to a reduction of such holdings during the last quarter. Sales of agricultural products for foreign currencies during this quarter were higher than a vear earlier, but the utilization of such currencies for grants, loans, and other Government operations overtook current




Disbursements by the Export-Import Bank increased during the year, although the fourth quarter was not quite so high as t! third, when large disbursements were made to Brazil and the Bank took over from private United States banks a la ore loan LO Colombia.


The e in seasonally adjusted receipts during 1958 from low point in the first quarter was mainly the result of el nes on United States private investments abroad

ous services transactions. The rise in invest


neomes, however, reflected only in part higher current About $75 million of obtan ed during the last quarter of the year was

he foreign enterprises ilie¢ to a dend disbursements of foreign subsidiaries of Americ: prior years. The cone frrures lo! the

recent rise 1n tax liabilities to Venezuela

ompanies from earnings in entire year have been reduced to


Seasonally adjusted, exports during the last quarter of 1958 were at an annual rate of about $16.2 billion, approxi- mately the same as during the first three quarters of the year. The rise in actual exports from $3.8 billion in the third quarter to $4.2 billion in the fourth appears to have been not more than the normal seasonal movement. Com- pared with the corresponding period of 1957, the decline narrowed down from 20 percent in the first quarter to 10 percent in the fourth. For the year as a whole, exports were about 16 percent smaller than in 1957.

Although seasonally adjusted figures for details are not available, comparisons with the corresponding quarters of the preceding year indicate certain differences in export developments.

During the early part of 1958 the decline from the previous year was most pronounced for agricultural products, coal, petroleum, copper, iron and steel mill products, and scrap. Foreign sales of finished manufactures fell only by 4 percent

Exports of agricultural products other than cotton changed in trend, however, and by the last quarter were about 6 percent higher than a year earlier

The year-to-year decline in petroleum exports was much smaller in the latter part of 1958 than during the first half, when it reflected the disappearance of the extraordinary exports early in 1957 follow ing the closing of the Suez ( ‘anal However, petroleum exports continued to drop even after these extraordinary shipments had stopped

For coal, as well as iron and steel mill products, the export decline seems to have continued although perhaps at a slower rate than earlier in the year. Large stocks