BLS DAILY REPORT, FRIDAY, NOVEMBER 1, 1996
RELEASED TODAY:
EMPLOYMENT SITUATION -- Nonfarm payroll employment increased in
October, and unemployment was unchanged. Payroll employment rose by
210,000, with the largest gains occurring in services and retail trade.
Manufacturing employment was about unchanged following a large decline
in
September. The unemployment rate was 5.2 percent in October, in line
with
both the August and September figures ....
COMMISSIONER'S STATEMENT -- Nonfarm payroll employment rose by
210,000
in October, in line with the average monthly gain so far this year.
Private sector employment increased by 250,000, after having shown
little
change in September ....
Initial unemployment insurance claims filed with state agencies for
unemployment insurance benefits rose 23,000 to a seasonally adjusted
total
of 342,000 during the week ended Oct. 26 (Daily Labor Report, page D-3).
The modest increase was identical to the decline the week before, when
most state offices were closed for the Columbus Day holiday ....
The Conference Board reports that its help-wanted advertising index
increased 3 percentage points to 84 percent of its 1987 base in
September,
suggesting continued moderate job growth ....(Daily Labor Report, page
A-2).
Most analysts predicted the slowdown shown in the GDP figures -- a
decline
from the heady reaches of the second quarter. They expect moderate but
steady growth to continue at least through the first of the year. The
sustainable level of economic activity in the third quarter -- a 2.2
percent annual rate of increase -- combined with low inflation and low
unemployment make for a healthy economy, economists say ....There is,
however, a difference of opinion among analysts over the fourth quarter.
While most see a continued slowing, with GDP in the 2 percent
neighborhood, some see the third quarter as a pause in consumer spending
that will pick up in the final quarter, pushing GDP to about 3 percent
....(Daily Labor Report, pages 2,D-1).
The Commerce Department reported personal income rose 0.6 percent in
September, but consumers kept their spending nearly flat ....(Daily
Labor
Report, page D-5)_____Consumers held spending in check in September and
diverted some of their higher earnings into savings, adding to signs of
slow but steady economic growth ahead ....(Washington Post, page F3)
_____The data may bode well for the holiday shopping season
....(Wall Street Journal, page A2).
In "More Growth, a Recession Or a `Growth Recession'?," Robert D.
Hershey
Jr. (New York Times, page D1) writes, "The question posed by the
economic
data is no longer whether the economy is slowing from last spring's
breakneck pace. Now it is, `How slow will it get?'" ....Geoffrey H.
Moore,
former BLS commissioner and respected business-cycle researcher, last
week
announced that his newly refined forecasting system had produced its
first
signal of what is sometimes called a "growth recession," a sustained
period
in which the economy keeps expanding but at a slow pace, below its
long-term trend of roughly 2.5 percent. He expects such a condition to
begin around the turn of the year. Dr. Moore, director of the Economic
Cycle Research Institute in New York, cautioned that he was making only
a
preliminary warning, though an aide asserted that Dr. Moore correctly
predicted in February 1990 that subpar growth then would deteriorate
into
the full-blown, though brief, recession, that began in July of that year
....
The great boom in corporate earnings, which helped propel the market and
buoyed the economy for more than four years, is over, says a New York
Times
article (page A1). What analysts are arguing over now is how weak
earnings
will be. While not all companies have reported this quarter, enough
have
released results to indicate that the third quarter should have the
weakest
gains in operating earnings in about four and a half years, according to
several Wall Street estimates. With market indexes near record levels,
weak earnings growth next year could hurt the stock market ....The
reasons
for the earnings slowdown run the gamut. They range from an inability
to
raise prices and the slowing productivity of workers to the moderating
pace
of growth in the economy and the fact that a lot of the corporate
cost-cutting and downsizing that helped earnings in recent years has now
been done ....
Boosted by strong aerospace and high-tech industries, the Pacific region
is
expected to perform well through 1997, economists and business and labor
leaders say. California will stay on its path of healthy growth, with
Hawaii and Alaska projected to lag the others in the coming months.
Some
areas, such as Las Vegas, have experienced such booming growth that
labor
shortages are an increasing problem. To attract some construction trade
workers, contractors have resorted to "raiding" each others' workforces,
paying premiums of up to $2 an hour, officials say. While Nevada has
retained its ranking as the state with the fastest job growth, it is
Washington state that has enjoyed the region's most dramatic turnaround,
several economists say. Boeing's decision to add 13,200 jobs in 1996
has
completely reversed the significant job losses of 1995 ....(Daily Labor
Report, pages 1,C-1).
