[PEN-L:870] BLS Daily Report

[Richardson_D]

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BLS DAILY REPORT, TUESDAY, NOVEMBER 3, 1998

__Consumer spending greatly exceeded income growth in September,
triggering a negative personal savings rate for the first time in almost
40 years, but analysts caution against reading too much into the
development.  The personal income of Americans increased a modest 0.2
percent in September, after gaining 0.4 percent in each of the previous
two months, the Commerce Department reports. ...  (Daily Labor Report,
page D-1; New York Times, page C2).
__Americans spent more money buying goods and services than they
received in after-tax income in September, resulting in a negative
national personal savings rate for the first time since 1959, when the
monthly figures were first published.  The savings rate, which measures
the share of disposable personal income left after people make their
purchases, fell into negative territory as such spending increased a
robust 0.5 percent and personal income rose by a much weaker 0.2
percent.  Much of the slowdown in income growth was the result of
September's small gain in new jobs and a cutback in the number of hours
worked. ...  (Washington Post, page E1). 
__Wages and incomes are still making gains, although not as fast as in
recent months. But even as consumers receive salary boosts, they are
still spending a large portion of their incomes. ...  (Wall Street
Journal, page A2).

__The National Association of Purchasing Management said that its
monthly survey showed that manufacturing activity slowed last month for
the fifth month in a row. ...  Manufacturing companies have been hard
hit by the decline in U.S. exports that began when several Asia nations
got into serious economic and financial difficulty more than a year ago.
Last month, the index for export orders fell to 42 from 45.8, an
indication that exports probably will continue to decline in coming
months, another reason to expect slower economic growth ahead, analysts
said.  Purchasing managers say that the prices their companies are
paying for materials and components continue to fall rapidly. ...
(Washington Post, page E1).
__The National Association of Purchasing Management's factory index fell
to 48.3 in October, from 49.4 in September - the lowest reading since
47.3 in March 1996. The index has hovered just below 50 since June, a
sign of a decline in manufacturing and slower economic growth over all.
....  But while manufacturing is slowing, builders are still reporting
growth.  Construction spending rose in September, after showing no
change in August, Commerce Department figures showed.  Construction,
especially of single-family homes, had been a mainstay of the economy
all year. ...  (New York Times, page C2).
__In another sign that the U.S. economy may be slowing, manufacturing
activity continued to contract in October. The slowing in manufacturing
activity has been brought on by foreign financial crisis.  That economic
turmoil has resulted in weak demand for U.S. exports and more intense
competition as foreign imports flood many U.S. markets. ...  (Wall
Street Journal, page A2).

Corporate profit growth stumbled in the three months that ended in
September, producing the first year-to-year drop since the nation was
clawing its way out of the recession in 1991.  Economists said companies
were squeezed by higher labor costs at home, financial weakness around
the globe, and an environment that makes it difficult to raise prices.
Those and other factors combined to push operating profits for the
nation's largest companies more than 3 percent below last year's third
quarter, according to First Call Corp., a Boston firm that tracks
analysts' forecasts and actual earnings reports. ...  (Washington Post,
page E1).

About 71 percent of all employers this year will grant paid holidays for
Thanksgiving and the day after, roughly the same as last year (68
percent), says the Bureau of National Affairs Inc., a Washington
publishing house.  Factory workers and others in manufacturing are the
most likely to receive the two-day holiday; hospital, bank, and retail
workers are among the least likely ("Work Week," Wall Street Journal,
page A1). 


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