The Economic Situation First Quarter, 1926

March 31, 1926

Report Outline
Business Activity in 1925
Business Activity During the First Quarter of 1926
Special Focus

At the close of 1925 activity throughout all lines of business was at a high level and during the first two months of 1926 the total volume of production and trade was generally higher than in the corresponding months of last year. Several factors, however, developed early in 1926 that caused some doubts as to the outlook for business during the remaining months of 1926, Sharp declines in the stock market, beginning about the middle of February and continuing with few interruptions until the end of March carried many stocks down and canceled most of the gains that had been made in the market as a whole since August and September.

Wholesale prices of commodities which had been declining since September dropped again in February and reached a level lower than at any time in 1925. In the early weeks of March prices of certain leading commodities continued to fall and in all probability the average for March will be still lower. Prices in the United States are still higher, however, than in several other important commercial nations. In recent years exports have been exceeding imports but both January and February of this year the volume of imports was in excess of that of exports.

These factors which characterized the business situation during the first months of 1926 were partly favorable and partly unfavorable. For purposes of analyzing the present situation and outlook, statistics already available for 1926 and certain others covering 1925 and previous years as a background are given in this report.

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