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).