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The Economic Situation
Published online by Cambridge University Press: 26 March 2020
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The economy has probably been expanding rather faster than we thought in August. Since the fourth quarter of 1962 total national output has been rising at an annual rate of 5-6 per cent, and industrial production, as would be expected during a recovery, has been rising faster—at a rate of about 7 per cent; for manufacturing output the figure is slightly above 7 per cent. This is consistent with the most recent FBI survey, which implies a rise in manufacturing output of about 2½ per cent during the four months May to September. There has been some rise in employment in recent months, though in the third quarter it may not have been much higher than in the fourth quarter of 1962. Unemployment has been falling rapidly. Over the four months May/June (by when all the effects of the cold winter must have disappeared) to September/October the downward trend was at a rate of about 12 thousand a month.
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- Copyright © 1963 National Institute of Economic and Social Research
References
page 4 note (1) A relationship has been calculated between the FBI balances and the change in the index of manufacturing output. See ‘The FBI Industrial Trends Enquiry’, page 65 of this issue.
page 4 note (2) This is true whether one applies Ministry of Labour or OECD seasonal adjustments. (See Economic Review, August 1963, no. 25, page 4.)
page 5 note (1) Economic Review, August 1963, no. 25, page 5.
page 5 note (2) See ‘The FBI Industrial Trends Enquiry’, page 71 of this issue.
page 6 note (1) The revisions to the provisional end-May figures, pub lished in the following February, for each of the past ten years were as follows :
page 10 note (1) See Economic Review, August 1963, No. 25, page 8.
page 10 note (2) See Economic Review, August 1963, No. 25, page. 9.
page 11 note (1) In addition, wage and salary earners received the repay ment of excess income tax paid in the second quarter, before the new allowances came into operation.
page 12 note (1) 1958 prices, seasonally adjusted.
page 13 note (1) Provisional calculations suggest that quarterly import movements in the period from the beginning of 1955 to the middle of 1963 can be explained quite well if stock-building and other forms of final expenditure are treated as separate explanatory variables. The results suggest that the import content (direct or indirect) of fluctuations in stock-building is likely to be high. Because some of the stock will contain imports, and not simply consist of imports, the effects of these fluctuations will not be fully reflected in the NIESR figures of changes in imported stocks (Statistical Appendix table 17).
page 14 note (1) This is on the assumption that part of the rise in the price of imports will be due to higher freight rates, affecting only invisibles, and part to higher valuation of sugar not reflected in the prices actually paid to producers.
page 17 note (1) The table does not give a fully satisfactory account of recent trends, since there are no good seasonal corrections for retail prices; so changes have to be given compared to a year earlier.
page 19 note (1) In the Netherlands, the rate of growth of investment is likely to increase next year and, since employers have already agreed in principle to a 5 per cent general wage rise from January 1964 and an additional 5 per cent on collective agree ments due to be renewed in 1964, it seems likely that con sumers' expenditure and national output will increase faster in 1964 than in 1963. This may also be true of Austria and Sweden, where investment may also recover. The memo randum accompanying the Norwegian Budget suggested some weakening in investment in 1964, because of a sharp fall in investment in ships; however, it forecast the same rate of rise in consumption and national product as in 1963.
page 20 note (1) Statistical Appendix, table 23.