The largest increase in private activities has occurred in business investments, which include residential and other construction, producers’ durable equipment, accumulation of inventories, and net exports.  Under conditions of global war, expenditures for private construction and equipment were held to a minimum and inventories were depleted.  With the beginning of reconversion these developments have been reversed.  Residential construction and outlays for plant and equipment are on the increase; inventories, too, are being replenished.  International transactions (excluding lend-lease and international relief which are included under war expenditures) showed an import surplus under conditions of global war.  In the past 3 months private exports have been slightly in excess of imports, for the first time since 1941.

Consumers’ budgets show a significant change.  On the income side, their total has declined but little because the reduction in “take-home” pay of war workers is, to a large extent, offset for the time being by the mustering-out payments received by war veterans and by unemployment compensation received by the unemployed.  On the expenditure side, however, consumers’ budgets, restricted during the war, have in creased substantially as a result of the fact that scarce goods are beginning to appear on the market and wartime restraints are disappearing.  Thus, consumers’ current savings are declining substantially from the extraordinarily high wartime rate and some wartime savings are beginning to be used for long-delayed purchases.

THE GOVERNMENT’S BUDGET AND THE NATION’S BUDGET

Calendar year 1944 and October-December 1945

Oct.-Dec. 1945 (start of

reconversion) (in seasonally

Calendar Year 1944 (global war) adjusted annual rates)

______________________ ____________________

Excess Excess

Expendi- (+), def- Expendi- (+),def-

Economic Group Receipts tures icit(-) Receipts tures icit(-) consumers

Income after taxes $134 ....... ...... $132 ...... .......

Expenditures ......$98............$107 .......

Excess of receipts, savings (+) ...... ...... +$35 ...... ...... +$25
Business

Undistributed profits and reserves $13 ...... ...... $9 ...... ......

Gross capital formation: 

Domestic ...... $4 ...... ...... $15 ......

Net exports1 ......--2............1......

Total, gross capital formation ......2............16......

Excess of receipts (+) or capital

formation (--) ...... ...... +$11 ...... ...... --$7

STATE AND LOCAL GOVERNMENT

Receipts from the public, other

than borrowing $10 ...... ...... $11 ...... ......

Payments to the public ...... $8............$9......

Excess of receipts (+) ............+$2............+$2

FEDERAL GOVERNMENT