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UNITED STATES DEPARTMENT OF COMMERCE / OFFICE OF BUSINESS ECONOMICS

THE NATIONAL INCOME ANDPRODUCT ACCOUNTS OF THEUNITED STATES, 1929-1965

Statistical Tables

A SUPPLEMENT TO THESURVEY OF CURRENT BUSINESS

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

August 1966

THE NATIONAL INCOME ANDPRODUCT ACCOUNTS OF THEUNITED STATES, 1929-1965

Statistical Tables

A Supplement to theSURVEY OF CURRENT BUSINESS

U.S. DEPARTMENT OF COMMERCEJohn T. Connor, Secretary

OFFICE OF BUSINESS ECONOMICSGeorge Jaszi, Director


August 1966

For Sale by the

Superintendent of Documents

U.S. Government Printing Office

Washington, D. C. 20402

Price $1.00


August 1966

FOREWORD

This volume marks another significant stage inthe development of the U. S. national income andproduct accounts.

Work on national income within the Governmentwas initiated in 1932 in response to Senate Reso-lution No. 220 of the 72d Congress, although re-search on the subject by private scholars hadbeen underway earlier. The publication of theNational Income Supplement to the July 1947Survey of Current Business, the 1951 and 1954editions of National Income, and U.S. Income andOutput (1958) were earlier milestones in this work.

Since publication of U.S. Income and Output,the Office of Business Economies' work in the fieldof national accounting has been extended throughthe preparation of the input-output table for 1958which was published in the November 1964 andSeptember 1965 issues of the Survey of CurrentBusiness. The input-output work also providedan important element of the benchmark revisionsof the national income and product accounts.

Principal responsibility for the planning andsupervision of the benchmark revision of the na-tional income and product accounts publishedin this report was carried by Lawrence Grose,Assistant Director, OBE; Irving Rottenberg, Chief,National Income Division; and John A. Gorman,Associate Chief, National Income Division. Staffmembers of the National Income Division respon-sible for important areas of work, listed inalphabetical order, are:Edward 0. Bassett Personal Consumption ExpendituresJacqueline Bauman Corporate ProfitsKenneth P. Berkman Proprietors' Income

Consumer Expenditures for ServicesQuarterly EstimatesCorporate ProfitsGovernments; Inventory InvestmentPersonal IncomeInterestRental Income

Carolyn G. BernhardLeo BernsteinRichard BondGeorge M. CobrenF. Beatrice ColemanPauline M. CypertJoseph Czako

Jeanette FitzwilliamsShirley F. LoftusAlan OdendahlMarilyn Y. RiceCharles A. WaiteRobert C. Wasson

Proprietors' IncomeState and Local GovernmentsPersonal Consumption ExpendituresFederal GovernmentFederal GovernmentCapita! Formation

Major responsibility for work on the input-outputtables was carried by Morris R. Goldman, Asso-ciate Director, OBE; Beatrice N. Vaccara, pres-ently Co-ordinator, Interagency Growth Studies;and Martin L. Marimont, Chief, National Eco-nomics Division. Staff members in this divisionwith major areas of responsibility were: MargaretF. Cannon, D. Anne Fisher, Norman Frumkin, VeraC. Perrella, Janet B. Riddle, Eugene P. Roberts,Mary Ann Sayre, Albert A. Schulman, Nancy W.Simon, Irving Stern, Genifer Sussman, and AlbertA. Walderhaug.

Significant contributions were also made by thefollowing OBE staff members: Lawrence Bridge,Leona Costa, Billy Jo Hurley, Richard B. Quanrud,and Edith Willis.

Construction of the national income and productaccounts consists of assembling statistics froma wide variety of primary sources and usingcomplex estimating techniques to fit these datainto the concepts of economic accounting. Weparticularly wish to acknowledge our debt to themany individuals and organizations that have pro-vided us with data and have generously assistedus in preparing the estimates. Because the listof such agencies and individuals is very longwe can offer only a blanket acknowledgment andexpress our deep appreciation.

GEORGE JASZIDirector, Office of Business Economics

August 1966

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August 1966

CONTENTS

Foreword III

Introduction VI

Definitions of Major Aggregates andComponents of the National Income

and Product Accounts VIII

Summary National Income and ProductAccounts, 1965 XII

National Income and Product Tables 1

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1THE NATIONAL INCOME ANDPRODUCT ACCOUNTS OF THEUNITED STATES, 1929-1965

Statistical Tables

1. Gross National Product and National Income

1.1 Gross National Product: Annually, 1929-65. and Seasonally AdjustedQuarterly Totals at Annual Rates, 1946-65 2

1.2 Gross National Product in Constant Dollars: Annually, 1929-65, andSeasonally Adjusted Quarterly Totals at Annual Rates, 1947-65 4

1.3 Gross National Product by Major Type of Product: Annually, 1929-65,and Seasonally Adjusted Quarterly Totals at Annual Rates, 1947-65 6

1.4 Gross National Product by Major Type of Product and Purchaser: An-nually, 1947-65 6

1.5 Gross National Product by Major Type of Product in Constant Dollars:Annually, 1929-65, and Seasonally Adjusted Quarterly Totals at AnnualRates, 1947-65 8

1.6 Gross National Product by Major Type of Product and Purchaser in Con-stant Dollars: Annually, 1947-65 8

1.7 Gross National Product by Sector: Annually, 1929-65, and SeasonallyAdjusted Quarterly Totals at Annual Rates, 1947-65 10

1.8 Gross National Product by Sector in Constant Dollars: Annually, 1929-65, and Seasonally Adjusted Quarterly Totals at Annual Rates, 1947-65 10

1.9 Relation of Gross National Product, National Income, and Personal In-come: Annually, 1929-65, and Seasonally Adjusted Quarterly Totalsat Annual Rates, 1946-65 12

1.10 National Income by Type of Income: Annually, 1929-65, and SeasonallyAdjusted Quarterly Totals at Annual Rates, 1946-65 14

1.11 National Income by Industry Division: Annually, 1929-65, and SeasonallyAdjusted Quarterly Totals at Annual Rates, 1946-65 16

1.12 National Income by Industry: Annually, 1929-65 18

1.13 National Income by Sector and Legal Form of Organization: Annually,1929-65 22

1.14 Gross Corporate Product: Annually, 1946-65, and Seasonally AdjustedQuarterly Totals at Annual Rates, 1946-65 22

1.15 Gross Auto Product: Annually, 1947-65, and Seasonally Adjusted Quar-terly Totals at Annual Rates, 1947-65 26

1.16 Gross Auto Product in Constant Dollars: Annually, 1947-65, and Season-ally Adjusted Quarterly Totals at Annual Rates, 1947*65 27

1.17 Gross Farm Product: Annually, 1929-65 28

1.18 Gross Farm Product in Constant Dollars: Annually, 1929-65 28

1.19 Gross National Product: Quarterly Totals Not Seasonally Adjusted, 1946-65 30

1.20 Gross National Product Originating in General Government, Farms, andAll Other Industries, in Current and Constant Dollars: Annually, 1909-28 30

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August 1966

2. Personal Income and Outlay

2.1 Personal Income and Its Disposition: Annually, 1929-65, and SeasonallyAdjusted Quarterly Totals at Annual Rates, 1946-65 32

2.2 Personal Income: Seasonally Adjusted Monthly Totals at Annual Rates,1946-65 36

2.3 Personal Consumption Expenditures by Major Type: Annually, 1929-65,and Seasonally Adjusted Quarterly Totals at Annual Rates, 1946-65 40

2.4 Personal Consumption Expenditures by Major Type: Quarterly Totals NotSeasonally Adjusted, 1946-65 42

2.5 Personal Consumption Expenditures by Type of Product: Annually, 1929-65 44

2.6 Personal Consumption Expenditures by Type of Product in ConstantDollars: Annually, 1929-65 48

3. Government Receipts and Expenditures

3.1 Federal Government Receipts and Expenditures: Annually, 1929-65 52

3.2 Federal Government Receipts and Expenditures: Seasonally AdjustedQuarterly Totals at Annual Rates, 1946-65 52

3.3 State and Local Government Receipts and Expenditures: Annually, 1929-65 54

3.4 State and Local Government Receipts and Expenditures: SeasonallyAdjusted Quarterly Totals at Annual Rates, 1946-65 54

3.5 Federal Government Receipts and Expenditures: Quarterly Totals NotSeasonally Adjusted, 1946-65 56

3.6 State and Local Government Receipts and Expenditures: Quarterly TotalsNot Seasonally Adjusted, 1946-65 56

3.7 Social Insurance Funds: Annually, 1929-65 58

3.8 Contributions for Social Insurance: Annually, 1929-65 58

3.9 Government Transfer Payments to Persons: Annually, 1929-65 58

3.10 Government Expenditures by Type of Function: Annually, 1952-65 GO

3.11 Government Purchases of Goods and Services by Object Classification:Annually, 1952-65 69

3.12 Relation of Federal Government Receipts and Expenditures in the Na-tional Income and Product Accounts to the Consolidated Cash Budget:Fiscal Years, 1952-65, and Calendar Year Cfuarterly Totals Not Sea-sonally Adjusted, 1959-65 70

3.13 Relation of State and Local Government Receipts and Expenditures inthe National Income and Product Accounts to Bureau of Census Data:Fiscal Years, 1952-65 72

4. Foreign Transactions4-1 Foreign Transactions in the National Income and Product Accounts-.

Annually, 1929-65, and Seasonally Adjusted Quarterly Totals atAnnual Rates, 1946-65 74

4.2 Foreign Transactions in the National Income and Product Accounts:Quarterly Totals Not Seasonally Adjusted, 1946-65 74

5. Saving and Investment51 Sources and Uses of Gross Saving: Annually, 1929-65, and Seasonally

Adjusted Quarterly Totals at Annual Rates, 1946-65 78

5-2 Purchases of Structures by Type: Annually, 1929-65 80

5-3 Purchases of Structures by Type in Constant Dollars: Annually, 1929-

65 825.4 Private Purchases of Producers' Durable Equipment by Type: Annually,

1929-65 845-5 Private Purchases of Producers' Durable Equipment by Type in Constant

Dollars: Annually, 1929-65 845.6 Change in Business Inventories: Annually, 1929-65 865.7 Comparison of Personal Saving in the National Income and Product

Accounts With That of the Securities and Exchange Commission-.Annually, 1946-65 86

6. Income and Employment by Industry

6.1 Compensation of Employees by Industry: Annually, 1929-65 90

6.2 Wages and Salaries by Industry: Annually, 1929-65 94

6.3 Average Number of Full-Time and Part-Time Employees by Industry:Annually, 1929-65 98

6.4 Number of Full-Time Equivalent Employees by Industry: Annually, 1929-65 102

6.5 Average Annual Earnings Per Full-Time Employee by Industry: Annually,1929-65 106

6.6 Number of Persons Engaged in Production by Industry: Annually, 1929-65 110

6.7 Supplements to Wages and Salaries by Industry Division: Annually, 1929-65 114

6.8 Income of Unincorporated Enterprises by Industry Division: Annually,1929-65 114

6.9 Noncorporate Capital Consumption Allowances by Industry Division:Annually, 1929-65 114

6.10 Inventory Valuation Adjustment by Industry Division: Annually, 1929-65 116

6.11 Net Interest by Industry Division: Annually, 1929*65 116

6.12 Corporate Profits (Before Tax) and Inventory Valuation Adjustment byBroad Industry Groups: Annually, 1929-65, and Seasonally AdjustedQuarterly Totals at Annual Rates, 1946-65 116

6.13 Corporate Profits Before Tax by Industry: Annually, 1929-65 118

6.14 Federal and State Corporate Profits Tax Liability by Industry: Annually,1929-65 122

6.15 Corporate Profits After Tax by Industry: Annually, 1929-65 126

6.16 Net Corporate Dividend Payments by Industry: Annually, 1929-65 130

6.17 Undistributed Corporate Profits by Industry: Annually, 1929-65 134

6.18 Corporate Capital Consumption Allowances by Industry: Annually, 1929-65 138

6.19 Corporate Sales by Industry: Annually, 1929-65 142

7. Supplementary Tables

7.1 Gross National Product: Receipts and Expenditures by Major EconomicGroups: Annually, 1929-65 148

7.2 Monetary and Imputed Interest: Annually, 1929-65 150

7.3 Imputations Included in the National Income and Product Accounts:Annually, 1929-65 152

7.4 Corporate Profits and Inventory Valuation Adjustment: Quarterly TotalsNot Seasonally Adjusted, 1946-65 154

7.5 Relation of Corporate Profits, Taxes, and Dividends in the National In-come and Product Accounts to Corresponding Totals as Tabulated bythe Internal Revenue Service: Annually, 1929-63 154

7.6 Selected Per Capita Income and Product Series in Current and Con-stant Dollars: Annually, 1929-65 156

8. Implicit Price Deflators

8.1 Implicit Price Deflators for Gross National Product: Annually, 1929-65,and Quarterly Seasonally Adjusted, 1947-65 158

8.2 Implicit Price Deflators for Gross National Product by Major Type ofProduct: Annually, 1929-65, and Quarterly Seasonally Adjusted, 1947-65 160

8.3 Implicit Price Deflators for Gross National Product by Major Type ofProduct and Purchaser: Annually, 1947-65 160

8.4 Implicit Price Deflators for Gross National Product by Sector: Annually,1929-65 160

8.5 Implicit Price Deflators for Gross Farm Product: Annually, 1929-65 162

8.6 Implicit Price Deflators for Personal Consumption Expenditures by Typeof Product: Annually, 1929-65 162

8.7 Implicit Price Deflators for Purchases of Structures by Type: Annually,1929-65 164

8.8 Implicit Price Deflators for Private Purchases of Producers' DurableEquipment by Type: Annually, 1929-65 164


August 1966

INTRODUCTION

This report presents the complete set of na-tional income and product tables that resultedfrom the comprehensive benchmark revisions thatcentered around the incorporation of the 1958 eco-nomic censuses into the national income andproduct estimates. Summary results of these re-visions, with explanations, were first published inthe August 1965 issue of the Survey of CurrentBusiness and have since been maintained on acurrent basis. In the present report, previouslypublished statistics for 1963, 1964, and 1965 havebeen updated to take into account the annualrevisions of the national income and productestimates that are customarily made in the Julyissue of the Survey. In these revisions, preliminarysource data are replaced by more comprehensivedata that have become available since the earlierestimates were made.

Another report scheduled for the future willcontain a comprehensive explanation of the con-

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August 1966

ceptual framework of the national income andproduct accounts and the statistical sources andmethods underlying the estimates. In the interim,National Income: 1954 edition, U.S. Income andOutput, and the description of the present bench-mark revisions in the August 1965 Survey maybe used as references.

Summary of changes in the array of tables

The principal departures in the present reportfrom the tables in U.S. Income and Output may besummarized as follows.

1. The following tables, which are regularlypublished separately in the Survey of CurrentBusiness, have been omitted from this report:income by state and region (tables II-8, II-9, and11-10 in U.S. Income and Output); expenditures onnew plant and equipment (table V-7); sources anduses of corporate funds (table V-10); and thebalance of payments tables (tables IV-5, lV-6, andV-11). Table IV-4, which showed the relation offoreign transactions in the national income ac-counts to the balance of payments, has beendropped because the definitional differences thatexisted formerly have been eliminated.

2. As announced in the April 1965 Survey, theOffice of Business Economics has suspended pub-lication of its series on distributions by size ofincome (tables 11-11, 11-12, and 11-13). This de-cision was made because the benchmark studyupon which the annual series was based hadbecome obsolete. Work on reconstruction of theseries is in progress.

3. The tables showing investment, deprecia-tion, and capital stocks in manufacturing estab-lishments (tables V-12, V-13, V-14, and V-15) havealso been omitted from the present volume. Thesewill be supplanted by new series—now in prepara-tion—which will present estimates of investment,depreciation, discards, and capital stocks for allindustries, with subtotals for manufacturing, farm,and all other. These estimates will be compiledaccording to various assumptions as to servicelives, methods of depreciation, and valuation.

4. The detail in some of the former tables hasbeen greatly improved and/or expanded and sometables have been added. In particular, attentionmay be directed to:

(a) Table 3.12, Relation of Federal GovernmentReceipts and Expenditures in the National Income

and Product Accounts to the Consolidated CashBudget, which has been comprehensively re-worked on the basis of an exhaustive analysis ofthe budgetary data. This reconciliation is nowavailable for quarterly periods (not seasonally ad-justed) rather than semiannually as in the past.

(b) Table 7.3 presents a new, comprehensiveresume of the nonmarket items or "imputations"that are included in the national income andproduct accounts. The table shows the amountsfor each of the imputations and the effect thatthe imputations have on the major aggregates inthe accounts. This table encompasses the infor-mation formerly included in table VII-17.

(c) Estimates of the gross auto product (tables1.15 and 1.16), which were initially published inthe February 1963 Survey, are now fully integratedwith the revised GNP figures.

(d) Gross national product by sector (table 1.7and 1.8) is now available quarterly, seasonallyadjusted.

(e) A table has been added on gross corporateproduct (table 1.14) providing more detail on thisimportant sector of the economy. This table wasfirst published on a continuing basis in the April1963 Survey.

(f) The table (2.6) on annual personal consump-tion expenditures in constant dollars has beengreatly expanded from a dozen detailed cate-gories of personal consumption expenditures toalmost 50.

(g) The tables on gross national product bymajor type of product (tables 1.3, 1.5, and 8.2)were extended to a quarterly basis in the Novem-ber 1960 Survey.

Alaska and Hawaii

The national income and product statistics for1960 and subsequent years are defined to includeAlaska and Hawaii; those for prior years are not.This does not significantly affect the comparabilityof the data for most purposes for which they areused. The GNP of Alaska and Hawaii combinedamounted to roughly $21/2 billion in 1960. A por-tion of this amount is probably included in theGNP and other major aggregates of the accountsfor 1959 and earlier years because the datasources and statistical techniques employed werenot sufficiently refined to exclude all Alaskan andHawaiian product and income from the estimates.

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August 1966

DEFINITIONS OF MAJOR AGGREGATESAND COMPONENTS OF THE NATIONAL

INCOME AND PRODUCT ACCOUNTS

I HE FOLLOWING definitions of the major in-come and product aggregates and their compo-nents are intended to give concise descriptionsof the coverage of the various series and to callattention to important aspects of the series whichare not readily apparent from their titles. Thedefinitions of the major aggregates should beconsidered in conjunction with the definitions oftheir components.

Major Income and Product Aggregates

Gross national product (table 1.1) is the marketvalue of the output of goods and services pro-duced by the Nation's economy, before deduc-tion of depreciation charges and other allowancesfor business and institutional consumption of dur-able capital goods. Other business products usedup by business in the accounting period areexcluded. The Nation's economy in this contextrefers to the labor and property supplied by resi-dents of the Nation. Gross national product com-prises the purchases of goods and services byconsumers and government, gross private do-mestic investment (including the change in busi-ness inventories), and net exports (exports lessimports).

Net national product (table 1.9) is gross nationalproduct less depreciation charges and other allow-ances for consumption of durable capital goods.It is the market value of the net output of goodsand services produced by the Nation's economy.All business products used up by business in theaccounting period are excluded. The Nation'seconomy in this context refers to the labor andproperty supplied by residents of the Nation.Net national product comprises the purchases ofgoods and services by consumers and govern-ment, net private domestic investment (includingthe change in business inventories), and net ex-ports.

National income (table 1.10) is the aggregateearnings of labor and property which arise in thecurrent production of goods and services by theNation's economy. Thus it measures the total fac-tor costs of the goods and services produced bythe economy. The Nation's economy in this con-text refers to the labor and property supplied byresidents of the Nation. Earnings are recorded inthe forms in which they accrue to residents ofthe Nation, inclusive of taxes on those earnings.As such, they consist of the compensation ofemployees, the profits of corporate and unin-corporated enterprises, net interest, and the rentalincome flowing to persons.

Personal income (table 2.1) is the current in-come received by persons from all sources, in-clusive of transfers from government and businessbut exclusive of transfers among persons. Notonly individuals (including owners of unincor-porated enterprises), but nonprofit institutions,private trust funds, and private health and welfarefunds are classified as "persons." Personal in-come is measured on a before-tax basis, as thesum of wage and salary disbursements, otherlabor income, proprietors' and rental income, in-terest and dividends, and transfer payments, minuspersonal contributions for social insurance.

Disposable personal income (table 2.1) is theincome remaining to persons after deduction ofpersonal tax and nontax payments to general gov-ernment. It is the income of persons availablefor spending or saving.

Components of Gross National Product (table 1.1)

Personal consumption expenditures consists ofthe market value of purchases of goods and serv-ices by persons and nonprofit institutions and thevalue of food, clothing, housing, and financialservices received by them as income in kind. Itincludes the rental value of owner-occupied

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August 1966

houses but does not include purchases of dwell-ings, which are classified as capital goods.

Gross private domestic investment consists ofthe net acquisitions of fixed capital goods byprivate business and nonprofit institutions; in-cluding commissions arising in the sale and pur-chase of new and existing fixed assets, principallyreal estate; and the value of the change in thevolume of inventories held by business. It coversall private dwellings including those acquired bypersons for their own occupancy.

Net exports of goods and services measures thebalance on goods and services, excluding trans-fers under military grants, as reported in the U.S.balance of payments statistics. Exports of goodsand services are included in the gross nationalproduct because they are produced by the Na-tion's economy. Since imports of foreign goodsand services are included in the purchases of thevarious market groups (consumers, government,etc.) distinguished in the GNP breakdown, theymust be deducted from the sum of these pur-chases to derive a measure of output attributableto the Nation's economy.

Government purchases of goods and servicesconsists of the net purchases of goods and serv-ices by general government and of the gross in-vestment of government enterprises. General gov-ernment purchases comprises employee compen-sation and net purchases from business and fromabroad. They exclude the acquisition of land, cur-rent outlays of government enterprises, transferpayments, government interest, and subsidies, aswell as transactions in financial claims.

Components of National Income (table 1.10)

Compensation of employees is the income ac-cruing to persons in an employee status as re-muneration for their work. It is the sum of wagesand salaries and supplements to wages andsalaries.

Wages and salaries consists of the monetaryremuneration of employees, inclusive of execu-tives' compensation, commissions, tips, andbonuses, and of payments in kind which representincome to the recipients.

Supplements to wages and salaries consists ofemployer contributions for social insurance and ofother labor income. Employer contributions forsocial insurance comprises employer payments

under the social security, Federal and Stateunemployment insurance, railroad retirement andunemployment insurance, government retirementand a few other minor social insurance programs.Other labor income comprises employer contribu-tions to private pension, health, unemployment,and welfare funds; compensation for injuries;directors' fees; pay of the military reserve; anda few other minor items.

Proprietors' income measures the monetaryearnings and income in kind of sole proprietor-ships, partnerships, and producers' cooperativesfrom their current business operations—other thanthe supplementary income of individuals derivedfrom renting property. It includes the inventoryvaluation adjustment described below and theother adjustments to taxable income describedunder corporate profits.

Rental income of persons consists of the mone-tary earnings of persons from the rental of realproperty, except the earnings of persons primarilyengaged in the real estate business; the imputednet rental returns to owner-occupants of nonfarmdwellings; and the royalties received by personsfrom patents, copyrights, and rights to natural re-sources.

Corporate profits (before tax) and inventoryvaluation adjustment is the earnings of corpora-tions organized for profit which accrue to resi-dents of the Nation, measured before Federal andState profits taxes, without deduction of depletioncharges, exclusive of capital gains and losses andintercorporate dividends, and including inventoryvaluation adjustment. It includes the profits ofstock life insurance companies and of mutualfinancial institutions. Bad debt expenses aremeasured by actual losses, not additions to re-serves; and the profit or loss of bankrupt firmsincludes the gain from unsatisfied debt. Corporateprofits includes net receipts of dividends andbranch profits from abroad, as reflected in thebalance of payments statistics, in addition toprofits earned in domestic operations. In othermajor respects, the definition of profits is in ac-cordance with Federal income tax regulations.

Corporate profits tax liability comprises Federaland State taxes levied on corporate earnings.

Dividends measures cash dividend disburse-ments by corporations organized for profit tostockholders who are U.S. persons.

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Undistributed profits is corporate profits beforetax less corporate profits tax liability less divi-dends. As such, it equals the change in corporatenet worth stemming from current operations. Itmay also be viewed as purchases of physicalassets plus net acquisition of financial assets lesscapita! consumption allowances, borrowing, andnew stock issues.

Net interest measures the excess of interestpayments of the domestic business system overits interest receipts, plus net interest received fromabroad. Interest paid by consumers and by gov-ernment, including government enterprises, arenot added into this computation because they arenot treated as factor costs of production. In con-sequence, the net interest component of nationalincome falls short of total interest accruing to per-sons from the business system and from abroadby the amount of consumer and government in-terest received by business. In addition to mone-tary interest flows, net interest includes imputedinterest arising in connection with the operationsof financial intermediaries. A portion of imputedinterest is equal to the value of financial servicesreceived by persons without explicit payment; theremainder represents property income received bylife insurance companies and noninsured pensionfunds less profits of life insurance companies.

Inventory valuation adjustment measures theexcess of the change in the physical volume ofnonfarm business inventories, valued at averageprices during the period, over the change in thebook value of nonfarm inventories. This adjust-ment is made to corporate and unincorporatedbusiness profits to remove the inventory profit orloss that occurs in business accounting when thebook cost of goods removed from inventoriesdiffers from the current replacement cost. Valua-tion in current prices of the costs of inventoriesused up puts sales and costs on a consistentbasis, and is necessary to derive measures ofnational output in current prices. No valuationadjustment is made for farm inventories and farmincome, which are calculated at average pricesduring the period.

Components of Personal Income (table 2.1)

Components of personal income not shown be-low have been defined as components of nationalincome.

Wage and salary disbursements is equal towages and salaries, as defined under national in-come, except that retroactive wages are countedwhen paid rather than earned.

Personal interest income measures total interest(monetary and imputed, private and government)accruing to U.S. persons. It is calculated as thesum of the net interest component of nationalincome, total interest paid by consumers, and netinterest paid by government including governmententerprises. This yields the correct amount of in-terest accruing to persons because interest paidby government and consumers to business hasentered negatively in the computation of nationalincome net interest. The imputed interest compo-nent of personal interest income is the same asin national income.

Transfer payments to persons consists of incomereceived by persons, generally in monetary form,for which no services are rendered currently. Itis composed of government transfer paymentsand business transfer payments. Governmenttransfer payments consist of payments under thesocial security (including medicare), State unem-ployment insurance, railroad retirement and un-employment insurance, and government retirementprograms, veterans' benefits (including veterans'life insurance proceeds), direct relief, payments tononprofit institutions other than for work doneunder research and development contracts, anda few other minor items. Business transfer pay-ments comprise corporate gifts to nonprofit insti-tutions, consumer bad debts, and a few otherminor payments.

Personal contributions for social insurance con-sists of payments by employees, self-employed,and by persons participating in the medicare pro-grams. The programs included are identical tothose listed under the employer contributions forsocial insurance component of supplements towages and salaries.

Other Components of Summary National Incomeand Product Accounts

Capital consumption allowances (table 1.9) con-sists of depreciation charges and accidental dam-age to fixed capital. Depreciation is the chargesmade by private business for the current consump-tion of durable capital goods and comparableallowances for nonprofit institutions. It also in-


August 1966

eludes depreciation charges for owner-occupiedhouses. Depreciation reported by business is notadjusted for changes in the replacement valueof capital goods, except for farm enterprises. Forcorporations and nonfarm unincorporated enter-prises, the definition of depreciation is the sameas in Federal income tax regulations.

Indirect business tax and nontax liability (table1.9) consists of tax liabilities and other generalgovernment revenues paid by business, exceptemployer contributions for social insurance andcorporate income taxes. It includes sales, excise,and property taxes. It also includes payments akinto taxes such as regulatory and inspection fees,fines and penalties, rents and royalties, and dona-tions. It excludes government receipts from thesale of commodities and services to businesswhich are similar to the ordinary purchases ofintermediate products by business. Receipts fromsuch sales are netted out of government pur-chases.

Statistical discrepancy (table 1.9) is the excessof the value of the estimated gross national prod-uct computed by adding the expenditure com-ponents over its independently estimated valuecomputed by adding national income, capital con-sumption allowances, indirect business tax andnontax liability, business transfer payments, andcurrent surplus of government enterprises lesssubsidies.

Subsidies less current surplus of governmententerprises (table 1.9): Subsidies are the mone-tary grants provided by government to privatebusiness. The current surplus of government en-terprises represents the excess of sales receiptsover current operating costs of government enter-prises. In the calculation of the current surplus,no deduction is made for depreciation charges,and interest is not included in either receipts orcosts.

Wage accruals less disbursements (table 1.9)equals the excess of business liabilities over dis-bursements due to retroactive wage settlements.

Personal tax and nontax payments (table 2.1)consists of the taxes (other than contributions forsocial insurance) and nontax payments to generalgovernment by individuals that are not deductibleas expenses of business operations. The principaltaxes are income taxes, personal property taxes,and inheritance taxes. Nontaxes include passport

fees, fines, donations, penalties, and tuition feesand hospital fees paid to schools and hospitalsoperated by State and local governments. Tax re-funds are deducted from payments as of thetime of refund.

Personal outlays (table 2.1) is the sum of per-sonal consumption expenditures, interest paid byconsumers, and personal transfer payments toforeigners. The latter consists of personal remit-tances in kind and in cash to abroad, net of suchremittances from abroad.

Personal saving (table 2.1) is the excess of per-sonal income over the sum of personal outlaysand personal tax and nontax payments. It consistsof the current saving of individuals (includingowners of unincorporated businesses), nonprofitinstitutions, and private health, welfare, and trustfunds. Personal saving equals the change in thenet worth of persons which may be further viewedas the acquisition of financial claims (such ascash and deposits, securities, and reserves of lifeinsurance companies and noninsured pensionfunds) less the net increase in indebtedness, plusthe acquisition of physical assets net of capitalconsumption allowances.

Government transfer payments to foreigners(table 3.1) consists of U.S. Government nonmilitarygrants to foreign governments in cash and inkind, and of U.S. Government pensions and othertransfers, as measured in the balance of paymentsstatistics.

Government surplus or deficit(—) (tables 3.1 and3.3) is the excess of government receipts overgovernment expenditures as defined in the na-tional income and product accounts. As such, itequals the acquisition of financial assets less bor-rowing by general government and governmententerprises. It also includes net government pur-chases of land. Net acquisitions of reproducibleassets are excluded here because they are in-cluded in government purchases of goods andservices.

Net foreign investment (table 4.1) is numericallyequal to the balance on goods, services, andunilateral transfers as measured in the balanceof payments statistics. As such, it is equal to theacquisition of foreign assets by U.S. residents lessthe acquisition of U.S. assets by foreign residents.It also includes the "errors and omissions" itemin the balance of payments statistics.

XI


August 1966

Table A

[Billions of dollars!

1.—National Income and Product Account

Line

1 Compensation of employees 392.92 Wages and salaries 358.43 Disbursements (2-7) 358.44 Wage accruals less disbursements (5-4) 05 Supplements to wages and salaries 34.56 Employer contributions for social insurance (3-14) 16.07 Other labor income (2-8) 18.5

8 Proprietors' income (2-9) 5579 Rental income of persons (2-10) 18.3

10 Corporate profits and inventory valuation adjustment -74.211 Profits before tax 75.712 Profits tax liability (3-11) 31.213 Profits after tax 44.514 Dividends (2-11) 19 215 Undistributed profits (5-5) 25.316 Inventory valuation adjustment (5-6) —1.5

17 Net interest (2-13) 17.8

18 NATIONAL INCOME .„„ 559.0

19 Business transfer payments (2-17) 2.620 Indirect business tax and nontax liability (3-12) 62.721 Less: Subsidies less current surplus of government enterprises

(3;6) 1.022 Capital consumption allowances (5-7) 59.623 Statistical discrepancy (5-9) —1.6

CHARGES AGAINST GROSS NATIONAL PRODUCT 681.2

Line

24 Personal consumption expenditures (2-3) 431.5

25 Durable goods 66.126 Nondurable goods 190.627 Services 174.8

28 Gross private domestic investment (5-1) 106.6

29 Fixed investment 97.530 President ia l 69.731 Structures 24.932 Producers' durable equipment 44.833 Residential structures 27.8

34 Change in business inventories 9.1

35 Net exports of goods and services 7.0

36 Exports (4-1) 39.0

37 Imports (4-2) 32.0

38 Government purchases of goods and services (3-1) 136.2

39 Federal 66.840 National defense 50.141 Other 16742 State and local 69.4

GROSS NATIONAL PRODUCT .- 681.2

2.—Personal Income and Outlay Account

1 Personal tax and nontax payments (3-10) 66.0

2 Personal outlays 443.4

3 Personal consumption expenditures (1-24) 431.5

4 Interest paid by consumers (2-15) 11.3

5 Persona! transfer payments to foreigners (net) (4-4) 6

6 Personal saving (5-3) 25.7

PERSONAL TAXES, OUTLAYS, AND SAVING 535.1

7 Wage and salary disbursements (1-3)

8 Other labor income (1-7)

9 Proprietors' income (1-8)

10 Rental income of persons (1-9)

11 Dividends (1-14)

12 Personal interest income ..13 Net interest (M7)14 Net interest paid by government (3-5)15 Interest paid by consumers (2-4)

16 Transfer payments to persons17 From business (149) ..... """"".""""18 From government (3-3) *

19 Less: Personal contributions for social insurance (3-15)

PERSONAL INCOME

358.418.555.718.319.2

•38.417.89.3

11.3397

2.637.113.2

535.1

XII


August 1966