[PEN-L:285] BLS Daily Report

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BLS DAILY REPORT, MONDAY, SEPTEMBER 28, 1998

U.S. manufacturing productivity growth in 1997 was slower than in five
of nine economies studied by BLS, the agency reports. ... (Daily Labor
Report, page D-7).

Consumer spending bounced back at a healthy clip in August, and
Americans' personal income rose 0.5 percent, the Bureau of Economic
Analysis of the Department of Commerce reports.  The spending rebound -
a 0.6 percent increase - was expected after the General Motors strike
and related shutdowns left retailers short of vehicles in July.  BEA
reported that the major contributor to the 0.6 percent rise in consumer
expenditures during August was a jump in durable goods purchases, mainly
autos. ... (Daily Labor Report, page D-1; New York Times, Sept. 26, page
B14)_____The global financial crisis takes little toll on U.S. consumer
spending.  Americans might not be shopping quite as freely as they did
earlier this year, but they're still going fairly strong.  But if U.S.
businesses stumble badly enough and long enough as a result of these
global problems, it will eventually hurt the consumers they employ and
serve, said an analyst of the Bank of Tokyo Mitsubishi in New York. ...
(Wall Street Journal, page A2).  

Ever since Fed Chairman Greenspan broadly hinted last week at an
interest rate cut, markets have treated a reduction as a near certainly
when the Fed's policymakers meet tomorrow.  An easing of monetary policy
would mark a swift and amazing turnaround in the central bank's
fundamental economic outlook.  For well over a year, the Fed's greatest
concern has been inflation, not recession.  Why would the Fed ease?  The
new dynamic since the summer has been continued deterioration in Asia's
economies and the disease's spread in Russia and Latin America, which
take more than 15 percent of U.S. exports. So far there has been minimal
concrete evidence of a slowdown in the U.S., mainly a slump in
manufacturing and a drop in corporate profits.  But some early warning
signs of deeper damage may be flashing, such as hints of eroding
business and consumer confidence, especially as the stock market slumps.
There are also fears of a looming credit contraction in the U.S. -
signaled by rising rates on junk bonds in recent weeks, and warnings by
some banks of plans to curb lending. ... (Wall Street Journal, page A2).


The Wall Street Journal's feature "Tracking the Economy" predicts that
the unemployment rate for September, due out Friday, will be the same as
the unemployment rate for August and that nonfarm payrolls will increase
by 210,000, compared with 365,000 in August.


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