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al gas have contributed to the low market prices of these fuels. This situationcoupled with relatively plentiful capital, and advanced technology, permittedrapid growth in conversion of fossil fuels to electric power. In addition, agenerous depletion allowance and low excise tax rates have helped keepdown consumer prices of energy.Low prices and a high rate of economic growth have encourageddomestic consumption of energy to expand. From 1950 to 1972 U.S. grossconsumption of energy increased at an annual rate of 3.5 percent (Table27). In 1972 the United States consumed about one-third of the world'sproduction of energy. Tables 28 and 29 show the distribution of U.S.energy use by sector and by source. Americans have often been accusedof wasting energy, but the low prices prevailing until 1973 provided littlereason to economize in its use. Because the price of labor was rising relativeto the prices of capital and energy, it paid, both in industry and in the home,to substitute capital and energy for labor.TABLE 27 —Gross consumption of energy in natural units, selected years, 1950—72YearTotal(quadrillionsof Btu's)Natural gas(trillions ofcubic feet)Petroleum *(millions ofbarrels perday)Coal 2(millions oftons)Hydropower(billions ofkilowatthours)Nuclear power(billions ofkilowatthours)19501960197034.044.667.45.9412.2721.376.529.8914.704943985251031542530.0.521.81972372.322.4316.4152628254.01 Includes petroleum products refined and processed from crude oil, including still gas, liquefied refining gas, andnatural gas liquids.2 Includes anthracite, bituminous, and lignite coals.3 Preliminary.Note.—Data relate to annual totals unless indicated otherwise.Source: Department of the Interior, Bureau of Mines.TABLE 28.—Consumption of energy, by user sector and source, 1972[Quadrillions of Btu's]Consumption of energy 1SourceTotalIndustrialTransportationHouseholdandcommercialTotal consumption..PetroleumsNatural gasCoaMElectric power..59.629.819.04.86.023.25.810.64.42.518.118.317.36.7.8 7.6.43.51 Preliminary.2 Includes petroleum products refined and processed from crude oil, including still gas, liquefied refining gas, andnatural gas liquids.3 Includes anthracite, bituminous, and lignite coals.4 Less than 0.05 quadrillions.Note.—While in 1972,18.6 quadrillion Btu's were used for generating electricity, the electricity so generated representedonly 6.0 quadrillion Btu's. This accounts for the difference between 72.3 quadrillion Btu's of gross energy consumptionin Table 27 and 59.6 quadrillion Btu's of consumption by user sector.Detail may not add to totals because of rounding.Source: Department of the Interior, Bureau of Mines.112
TABLE 29.—Use of energy inputs for electric power, 1972[Quadrillions of Btu's]Energy inputTotal uses iTotal usesPetroleumNatural gasCoalHydropowerNuclear power18.63.14.17.83.0.6i Preliminary.Source: Department of the Interior, Bureau of Mines.Wholesale energy prices in the United States were quite stable, relative toother wholesale prices, during the 1960's. But toward the close of the decadethe price of coal began to move upward, and in 1973 petroleum prices increasedsharply (Table 30). Consumer prices of energy actually were decliningfrom 1960 to 1972, relative to other consumer prices. For instance, therelative price of gasoline and motor oil fell 17.2 percent between 1960 and1972 but began to increase steeply near the end of 1973 (Chart 7).Chart 7Consumer Prices of Gasolineand Motor Oil1967=100130120—-ANNUALLYMONTHLY/ri110GASOLINE AND MOTOR OIL PRICES- RELATIVE TOV ALL CONSUMER PRICES (CPI) ^^^-"^"-1009080--—s "' \ N. A/GASOLINE AND MOTOR^^*OIL PRICES (CPI)I I I I I I I I I 1 I I I 1 1 111111111111957 59 61 63 65 67 69 71 1973/SOURCE: DEPARTMENT OF LABOR.113
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ECONOMICTRANSMITTEDTO THE CONGRESSF
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CONTENTSPageECONOMIC REPORT OF THE
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ECONOMIC REPORT OF THE PRESIDENTTo
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of the inflation rate of 1973, and
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or permit incentives—including hi
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people of an easy time. Like our pa
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THE PRESIDENT:LETTER OF TRANSMITTAL
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CHAPTER 3. INFLATION CONTROL UNDER
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Page7. Unemployment Rates by Sex an
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Page53. Maximum Percent Change in E
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We have specific problems, too, asi
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This curtailment of supply does, of
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consumption we would not have chose
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outside the food and fuel sectors a
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about $14 billion from deficit to s
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8 percent, at annual rates. Continu
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A third method, which seems to have
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DEVELOPMENT OF LOW-COST ENERGY FOR
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would otherwise have been invested
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TRANSPORTATION REFORMLast year the
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constraints. Restrictions on entry
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In early 1974 the Commerce Departme
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Consumer SpendingConsumer expenditu
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Chart 1Changes in GNP, Real GNP, GN
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During the fourth quarter the downt
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A number of points may be noted abo
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income do not appear to have played
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Chart 2Changes in Real GNPPERCENTUN
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of essentially declining participat
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The unemployment rate for adult mal
Page 68 and 69: from job losers, the remainder of t
Page 70 and 71: to maintain a somewhat larger work
Page 72 and 73: Chart 3Changes in Selected Price Me
Page 74 and 75: TABLE 12.—Changes in selected pri
Page 76 and 77: production workers, and it is sensi
Page 78 and 79: the profits that companies report a
Page 80 and 81: Two measures of changes in income t
Page 82 and 83: About $8 billion of the growth in e
Page 84 and 85: effect of covered wage and employme
Page 86 and 87: Since these apparent stabilization
Page 88 and 89: MONETARY POLICY AND FINANCIAL MARKE
Page 90 and 91: lation requiring ceilings on all CD
Page 92 and 93: TABLE 19.—Offerings of new securi
Page 94 and 95: CHAPTER 3Inflation Control Under th
Page 96 and 97: (A more detailed presentation of th
Page 98 and 99: ate of advance in grocery store foo
Page 100 and 101: to the economy but also in the sens
Page 102 and 103: were imposed, limiting prices to th
Page 104 and 105: spurring of domestic inflation by e
Page 106 and 107: was more than twice as high in 1973
Page 108 and 109: wage increases in many cases, const
Page 110 and 111: TABLE 26.—Behavior of items in co
Page 112 and 113: Chart 6Changes in RelatedWholesale
Page 114 and 115: and natural gas. A complex set of f
Page 116 and 117: CHAPTER 4Energy and AgricultureFOR
Page 120 and 121: TABLE 30*—Wholesale prices, all i
Page 122 and 123: tion sector, which in 1972 accounte
Page 124 and 125: United States on oil imports, OPEC
Page 126 and 127: of old oil and prices of imported a
Page 128 and 129: LONG-TERM PROSPECTSThe price of imp
Page 130 and 131: important that the higher costs be
Page 132 and 133: improving the environment. The fund
Page 134 and 135: pollutants into the atmosphere will
Page 136 and 137: of research and rapid mechanization
Page 138 and 139: lion in fiscal 1972. Actually the a
Page 140 and 141: a minimum income. Unless prices fal
Page 142 and 143: The Administration supports the exa
Page 144 and 145: and estimates of some of these effe
Page 146 and 147: Since families typically pool their
Page 148 and 149: ability were not perfectly correlat
Page 150 and 151: Farm wages and farm income received
Page 152 and 153: TABLE 37.—Average usual weekly ea
Page 154 and 155: Chart 9Real Incomes for Men in Diff
Page 156 and 157: ecause they have acquired more expe
Page 158 and 159: whose owners or white workers have
Page 160 and 161: Several factors can be mentioned to
Page 162 and 163: y social pressures, however, which
Page 164 and 165: TABLE 42.—Relation of wage and sa
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for public housing may be valued by
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8 to 20 percent for black females.
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sufficiently high to cover the addi
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TABLE 45.—Federal Government tran
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given to the problems of poverty du
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TABLE 47.—Trends in the employmen
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enefit increases greater than the i
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(Table 45). Medicare is chiefly des
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Public assistance is specifically d
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Then, subtracting equation (4) from
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policies, and the tensions among co
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In the fourth quarter the dollar ro
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which include trade, grants and oth
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tarily by foreign central banks, ev
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ply of oil, and by domestic price c
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in the United States. In view of th
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TABLE 52.—U.S. balances on intern
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esult from changes in market value
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TABLE 54.—Major changes in capita
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attempt was made to agree on a code
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The official price of gold was rais
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system, these demand changes were a
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What Pressures Should Be Exerted on
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The composition of reserves among d
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prices of approximately the same or
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tained, they would probably be felt
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Reducing Nontariff BarriersIn order
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Structural problems. Agreements on
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arrangements which are designed to
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capital and the means of putting th
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Canada and four smaller countries u
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currencies have appreciated relativ
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Effective Changes in Other Currenci
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Activities of the Advisory Committe
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Appendix BREPORT TO THE PRESIDENT O
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Report to the President on the Acti
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govern the exploitation of the reso
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Manpower and Social Affairs Committ
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Junior Staff EconomistsJames S. Fac
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Appendix CSTATISTICAL TABLES RELATI
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PRODUCTION AND BUSINESS ACTIVITY:Pa
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NATIONAL INCOME OR EXPENDITURETABLE
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TABLE C-2.—Gross national product
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TABLE C-3.—Implicit price deflato
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TABLE C—8.—Gross national produ
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TABLE C-10.—Gross national produc
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TABLE C-12.—Personal consumption
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TABLE C-14.—Relation of gross nat
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TABLE C—16.—Relation of nationa
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TABLE C-18.— Total and per capita
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TABLE C-19.—Sources of personal i
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TABLE C-21.—Saving by individuals
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POPULATION, EMPLOYMENT, WAGES, ANDP
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TABLE C-24.—Noninstitutional popu
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TABLE C-26.— Selected unemploymen
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TABLE C—28.—Unemployment insura
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TABLE C-29.—Wage and salary worke
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TABLE C-31.—.•Average weekly ea
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TABLE C-33.—Changes in output per
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TABLE C—35.—Industrial producti
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TABLE C-37.—Capacity utilization
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TABLE C—38.—New construction ac
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TABLE C-39.—New housing starts an
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TABLE C-41.—Sales and inventories
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TABLE C-43.—Manvjacturers* new an
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TABLE O45.—Consumer price indexes
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TABLE C—47.—Consumer price inde
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TABLE C~49.—Wholesale price index
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TABLE C-50.—Wholesale price index
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194819491950.,1951195219531954Yearo
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TABLE C-53.—Commercial bank loans
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TABLE G-54.—Total funds raised in
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TABLE C-56.—Federal Reserve Bank
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TABLE C-58.—Bond yields and inter
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TABLE C-59.—Short- and intermedia
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TABLE C-61.—Mortgage debt outstan
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TABLE C-63.—Net public and privat
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TABLE C-65.—Federal budget receip
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TABLE C-66.—Relation of the Feder
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TABLE C-68.—Receipts and expendit
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TABLE C-10.—State and local gover
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TABLE C-72.—Estimated ownership o
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CORPORATE PROFITS AND FINANCETABLE
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TABLE C-76.—Relation of profits a
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TABLE C-77.—Sources and uses of f
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TABLE C-79.—State and municipal a
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TABLE C-81.—Business formation an
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Year1929...1933...1939...1940...194
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TABLE C-85.—Indexes of prices rec
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TABLE G-87.—Comparative balance s
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TABLE G-88.— U.S. balance of paym
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TABLE C-90.— U.S. merchandise exp
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TABLE C-92.—International reserve
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TABLE G-94.—International investm
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TABLE C-96.—Consumer price indexe
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