BUREAU OF LABOR STATISTICS, DAILY REPORT, WEDNESDAY, MAY 29, 2002: RELEASED TODAY: In April, 290 metropolitan areas had higher unemployment rates than a year earlier, 31 areas had lower rates, and 10 areas had rates that were unchanged, the Bureau of Labor Statistics reports. Thirteen metropolitan areas posted jobless rates of 10.0 percent or more, eight of which were located in California's Central Valley. Twenty-one areas had unemployment rates below 3.0 percent, with eight in the South, seven in the Midwest, and four in the Northeast. The national unemployment rate in April was 5.7 percent, not seasonally adjusted.
Each quarter, the Bureau of Labor Statistics reports on overall productivity trends. But it's less well-known that the BLS issues this data annually on productivity growth in individual industries, says the "Economic Trends" feature of Business Week (May 27, page 30). The latest such report, recently released, goes through 2000. It shows which industries were the productivity leaders and the laggards over the last decade. And it offers some useful insights into productivity gains in service industries such as retailing and transportation. Among those at the top of the heap are nonstore retailers, including online and catalog sales. Their productivity grew at a 9 percent annual rate in the 1990s. By contrast, productivity fell in several service sector industries, including grocery stores and cable TV. In the long economic expansions of the 1980's and 1990's the wealth of middle Americans seemed to rise. Their stock portfolios and home ownership gave them the appearance of growing richer. But now it turns out that net worth went down, not up, according to Edward N. Wolff, a New York University economist. Middle Americans are not the 20 percent of all households whose breadwinners are paid $75,000 a year or more. Those households have increased their total wealth since 1983, the starting point of Wolff's study. That is not the case for the median household, with an annual income of $50,000 or so, and whose breadwinners are 47 to 64. They suffered perhaps a 13.5 percent decline in wealth, when their present net worth is adjusted for inflation (New York Times, Money & Business Section, May 26, page 4). Personal income increased 0.3 percent in April, following a 0.4 percent increase in March, according to figures released by the Bureau of Economic Analysis. During the same period, consumers increased spending at an annual rate of 0.5 percent. Mark Vitner, Wachovia Securities economist, said the gains in personal income were insufficient to offset the effect of taxes and inflation. Most of the increase in personal consumption expenditures was in nondurable goods (Daily Labor Report, page D-1). While the U.S. economy continues to recover from last year's slump, the pace of recovery is slowing from the first quarter's strong gains, several economic reports have indicated. Consumer spending for goods and services rose 0.5 percent last month, somewhat less than analysts had expected, with purchases of durable goods such as new motor vehicles responsible for most of the increase, the Commerce Department says. After adjustment for inflation, the increase was 0.2 percent. Meanwhile, personal income rose 0.3 percent in April, partly because of an increase in unemployment benefits paid under a law allowing an additional 13 weeks of eligibility for people who had exhausted their regular 26 weeks of benefits. The wages and salary component of income rose only 0.1 percent (John M. Berry, The Washington Post, page E1). Consumers have remained optimistic and kept spending -- especially when it comes to homes -- during the current quarter. But pressures on consumer finances are starting to emerge, which could cloud the recovery if business investment doesn't rebound soon. Sales of pre-existing homes surged 7 percent in April from a month earlier to a seasonally adjusted annual rate of 5.79 million units, the National Association of Realtors said yesterday. That sales pace, the third highest ever, was only slightly below the record 6.05 million-unit rate reached in January, and it confounded expectations that the housing market would slow as summer approached (The Wall Street Journal, page A2). Consumer confidence edged higher in May, but the expectations of Americans fell for a second month, a business research report said yesterday providing further suggestions that the recovery is likely to slow in coming months. The Commerce Department, in a separate report, said that consumer spending rose for a fifth consecutive month in April. And the National Association of Realtors reported that the sales of existing homes surged 7 percent in April. Over all, economists said, the reports suggested that consumers were likely to keep supporting the economy until businesses began investing and hiring again (Reuters, The New York Times, page C7). The nation's factories, hardest hit by last year's recession, saw fresh signs of improvement in April, with orders for costly manufactured goods rising for a fifth straight month (Jeannine Aversa. Associated Press, <http://www.usatoday.com/aponline/2002052317/2002052317000400.htm>). DUE OUT TOMORROW: Mass Layoffs in April 2002
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