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Federal government spending increases, largely for military purposes, have provided a sizable stimulus to economic activity in both Texas and the nation as a whole during 1967. A further substantial rise in federal government spending is expected during the fiscal year ending June 30, 1968, even after allowance is made for present prospects of a cutback of $3 billion to $4 billion in expenditures from previously planned levels. Without a general tax increase, the federal government's budget deficit could be around $20 billion or more in the current fiscal year. Prospects for congressional approval of the administration's requested 10-percent surtax had been dim, but the prospects for approval appeared brighter as of late November. Besides the expected increases in the regular government budget, proposals before Congress would raise social-security benefits and taxes by signifi- cant amounts over the next two years. Monetary developments during November pointed to the possibility that monetary and fiscal-policy restraints on Texas and national business activity during the coming months would be somewhat greater than previously an- ticipated. After international payments difficulties caused the British government to devalue the pound and the Bank of England to raise its discount rate to 8 percent during the weekend of November 18, the Federal Reserve System raised its basic discount rate to 4.5 percent from 4 percent to reduce United States losses of short-term capital as a result of the British actions. Increases in American commercial bank rates and other interest rates followed. SELECTED BAROMETERS OF TEXAS BUSINESS (Indexes - Adjusted for seasonal variation - 1957-59 = 100) Percent change Year-to-date Sep Year-to-date Oct 1967 1967ge Oct average from from Index 1967 1967 1967 Sep 1967 1966 Texas business activity. 200.8 191.4 192.6 + 5 11 Crude-petroleum production. ... . .. ....115.1 *118.0 * 111.1 - 2 + 8 Crude-oil runs to stills..130.2 125.7 124.3 + 4 + 4 Total electric-power use.195.7 * 204.4 *203.0 -- 4 + 7 Industrial electric- power use .. ... . . ...181.1 * 189.7 * 183.3 - 5 + 7 Bank debits. .. .. .. .. ..'213.0 203.3 204.1 + 5 + 11 Ordinary-life-insurance sales .. . ... .. .. .. ....218.0 199.7 191.6 9 7 Building construction authorized. .. .. ....160.7 127.1 158.3 26 + 17 New residential ....139.2 116.4 118.7 + 20 + 22 New nonresidential . .201.9 139.6 225.6 45 + 16 Total industrial production .. .. .. .. ..158.4 * 159.9 * 155.6 - 1 + 7 Miscellaneous freight carloadings in S.W. district. ......81.0 78.1 82.1 + 4 1 Total nonfarm employment. .. . .....132.1 * 132.0 * 130.9 ** + 5 Manufacturing employment. .. .. ....134.8 * 133.8 * 133.0 + 1 + 4 Total unemployment ..67.4 74.6 73.4 -- 10 - 8 Insured unemployment .49.9 47.1 49.1 + 6 - 9 Average weekly earnings- manufacturing .....132.1 * 130.8 * 128.5 + 1 + 3 Average weekly -hours- manufacturing ....100.3 * 100.4 * 101.0 ** - 1 * Preliminary ** Change is less than one half of 1 percent.
Reflecting the mixed pattern of changes in basic eco- nomic activity and especially the effects of the automobile strike, retail sales, on a seasonally adjusted basis, declined in both Texas and the nation during October. Various kinds of durable and nondurable goods stores in Texas reported seasonoily adjusted sales declines, but the great- est decrease was a seasonally adjusted decline of nearly one-fifth in automotive store sales. PRELIMINARY ESTIMATES OF TOTAL RETAIL SALES Percent change Oct , Oct 1967 Oct 1967 Jan-Oct 1967 Type of store (miu. of dollars) Sep 1967 Oct1966 Jan-Oct 1966 Total 1,438.0 + 3 + 3 + 3 Durable goodst 557.0 +11 + 6 2 Nondurable goods 881.0 ** + 1 + 4 p Preliminary. * Bureau of Business Research estimates based on data from the Bureau of the Census. t Contains automotive stores, furniture stores, and lumber, building- material, and hardware dealers. ** Change is less than one half of 1 percent. Consumer prices have continued to rise during 1967. Available October figures show the consumer price index 2.6 percent higher than a year earlier. The U. S. Commissioner of Labor Statistics has forecast that con- sumer prices will rise by more than 3 percent in 1968 even if Congress passes a general' tax increase to reduce inflationary pressures. Total gross national product in 1968 is expected to rise by about 8 percent, led by federal government spending and private construction outlays, according to one early forecast for next year released by a highly regarded pri- vate research department. Consumer spending will account for a large dollar increase, but its percentage rate of gain is expected to be below that of total gross national product if a tax increase is in effect by early next year. BUSINESS-ACTIVITY INDEXES FOR 20 SELECTED TEXAS CITIES (Adjusted for seasonal variation--1957-59=100) Percent change Year-to-date Year-to-date Oct 1967 19er67 Oct Sep average from from Index 1967 1967 1967 Sep 1967 1966 Abilene. .. .. .. ..127.0 125.7 137.9 + 1 - 4 Amarillo ......167.9 154.2 169.5 9 + 1 Austin .. .. .. .. ..210.0 203.5 205.0 + 3 + 13 Beaumont .....192.6 194.0 187.9 - 1 + 6 Corpus Christi ... .154.7 131.1 141.7 18 + 4 Corsicana .....136.7 . 132.2 150.5 + 3 + 10 Dallas. .. .. .. ....246.5 226.7 224.1 + 9 + 15 El Paso. .. .. ....136.4 127.6 133.1 + 7 + 9 Fort worth ....158.3 148.1 146.2 + 7 + 8 G alveston .....117.5 120.5 117.1 - 2 4 Houston ... . .....223.4 204.5 207.9 + 9 + 12 Laredo .. .. . .....196.7 189.7 191.8 + 4 + 13 Lubbock ......152.0 157.5 161.6 - 3 ** Port Arthur . .. .113.3 116.1 112.1 - 2 + 1 San Angelo ....148.4 132.0 145.2 + 12 + 4 San Antonio . ... .176.7 168.2 169.6 5 S Texarkana .....210.3 204.2 210.6 3 21 Tyler. .. .. .. .. ..144.6 141.6 147.3 + 2 + 3 Waco. .. .. .. ....160.5 157.5 158.4 + 2 + 5 Wichita Falls . . .132.3 125.8 132.3 + 5 - 3 ** Change is less than one half of 1 percent.
University of Texas. Bureau of Business Research.Texas Business Review, Volume 41, Issue 12, December 1967,
periodical,
December 1967;
Austin, Texas.
(https://texashistory.unt.edu/ark:/67531/metapth1204024/m1/4/:
accessed July 18, 2024),
University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu;
crediting UNT Libraries Government Documents Department.