BLS DAILY REPORT, THURSDAY, FEBRUARY 8, 2001:
> Reflecting the overall economic slowdown, the pace of productivity growth
> moderated in the nonfarm business sector to a 2.4 percent annual rate of
> increase in the fourth quarter of 2000, according to the Bureau of Labor
> Statistics. For all of 2000, nonfarm productivity climbed 4.3 percent --
> the strongest performance since 1983. One of the few unfavorable pieces
> of news in the productivity report was the 6.6 percent rise in
> compensation per hour in the nonfarm sector during the fourth quarter.
> Unit labor costs accelerated to a 4.1 percent advance, reflecting the
> sharp rise in compensation. For all of 2000, the 4.3 percent productivity
> gain helped to offset the 5.1 percent jump in compensation, resulting in a
> 0.7 percent rise in unit labor costs (Daily Labor Report, page D-1).
>
> "It sometimes takes a slowdown to confirm a gain," writes John M. Berry in
> The Washington Post (page E1). Usually when U.S. economic growth slows
> sharply, as it did in the second half of last year, business efficiency
> also takes a nose dive. Typically, gains in labor productivity -- the
> amount of goods and services produced for each hour worked -- become very
> weak or turn into declines. Some analysts expected that to happen this
> time. But so far, at least, it hasn't. And that lends weight to the
> growing belief that the U.S. economy has changed in fundamental ways that
> should enable it to grow on a sustainable basis more rapidly than in
> decades past. The Labor Department reported yesterday that labor
> productivity at firms other than farms rose at a 2.4 percent annual rate
> in the fourth quarter, even though the output of goods and services
> increased at only a 1.2 percent rate. The third-quarter productivity gain
> was also greater than the increase in output.
>
> Despite the slowing economy, American workers increased their productivity
> at an annual rate of 2.4 percent in the last 3 months of 2000, a gain that
> was higher than expected, the government reported. At the same time,
> workers' hourly compensation, adjusted for inflation, rose at an annual
> rate of 3.8 percent, the fastest growth since the first quarter of 1998
> (The New York Times, page C16).
>
> The U.S. economy continued to make productivity gains last quarter, but at
> a slower rate consistent with the cooling in overall growth. The Labor
> Department said nonfarm business productivity rose at a seasonally
> adjusted annual rate of 2.4 percent in the fourth quarter of 2000. That
> is slower than the third-quarter increase of 3 percent, revised downward
> from an initial estimate of 3.3 percent, and significantly below the 6.3
> percent gain reported in the second quarter (The Wall Street Journal, page
> A2).
>
> The U.S. rustbelt is once again feeling the pain of an economic slowdown,
> says Karen Pierog in a Reuters story with a Chicago dateline, in the Los
> Angeles Times (February 2). Job layoffs were way up in the Midwest
> compared to other parts of the country in December, according to the
> Bureau of Labor Statistics. The agency reported this week that layoff
> events that involve at least 50 employees at a single company doubled to
> 1,079 in the Midwest in December, compared to 531 in December 1999. The
> number of workers getting the bad news ballooned to 157,486 from 67,805 a
> year ago. "It's a manufacturing story, mostly," said a senior economist at
> the Federal Reserve Bank of Chicago. He said that most of the layoffs
> occurred in the manufacturing sector, which is still highly concentrated
> in the Midwest. Manufacturing strongholds like Michigan and Ohio, which
> suffered through past recessions, saw a surge in job losses. Layoffs in
> Michigan more than quadrupled in December from November, while they more
> than doubled in Ohio, according to the labor statistics bureau. Illinois
> and Wisconsin also saw increases in layoffs. The Chicago Fed's economist
> said a better picture of the Midwest economy will be formed with the
> release of layoff data for January. He said that data should show if the
> December increases were a quirk or if a trend is emerging. However, John
> Challenger, executive vice president of the international outplacement
> firm Challenger, Gray & Christmas, said more job layoffs are looming,
> spreading from manufacturing to the high technology sector.
>
> The Labor Department reported that the number of workers losing their jobs
> in mass layoffs -- whose in which a company fires 50 or more employees --
> rose 54 percent in the fourth quarter of last year compared with a year
> earlier. In California, more than 154,000 people lost their jobs, a 14
> percent hike from the 1999 period. Yet the January employment report
> showed the nation added 268,000 net jobs last month. The U.S.
> unemployment rate has stayed low in part because small and mid-size
> companies continue to hire even as larger companies shed workers,
> economists say. Also, many recent layoff announcements have been in the
> manufacturing sector, which now accounts for only about 20 percent of the
> total U.S. gross domestic product. The economy has continued to add jobs
> as service-industry hirings have outweighed manufacturing layoffs (Walter
> Hamilton, The Los Angeles Times, February 3).
>
> First the bad news: thousands of jobs are being eliminated in the
> telecommunications industry. Second, the not-so-bad news: the employees
> losing jobs aren't necessarily having a tough time finding new work,
> largely due to the shortage of skilled technical workers in the U.S., says
> Jeanie Stokes writing in Broadband Week (February 5). The Bureau of Labor
> Statistics tracks mass layoffs involving 50 or more people. It reports
> that more than 320,000 individuals were affected by major job cuts during
> October and November, the latest months for which data is available.
> More than 258,500 jobs were lost in the comparable period in 1999. The
> BLS has a hard time tracking high tech and telecommunications job cuts
> since they don't fit into the Labor Department's traditional industry
> categories that are based on manufacturing. But Lewis Siegel, senior
> economist at the BLS in Washington, says labor analysts aren't seeing
> pressure on unemployment levels due to workers with technical skills
> losing their jobs. "The skill levels are such that they go out one door
> and in another door," Siegel says. "These layoffs have been going on for
> some time, and we are not seeing them at the unemployment office."
>
> Data compiled by the Bureau of National Affairs in the first 6 weeks of
> 2001 show a weighted average first-year increase of 3.9 percent in newly
> negotiated contracts, the same increase as that reported for the
> comparable period in 2000. Manufacturing settlements provide a weighted
> average gain of 3.5 percent, compared with 3.7 percent a year ago.
> Nonmanufacturing agreements, excluding construction contracts, post a
> weighted average increase of 4.4 percent, compared with 4.1 percent last
> year (Daily Labor Report, page D-18).
>
> The rising costs of prescription drugs are driving up the premiums of
> insurance plans that supplement traditional Medicare and include drug
> coverage. The high costs of these so-called Medigap policies are forcing
> many elderly and disabled people out of the programs even as Medicare
> managed care plans and employers are retreating from providing drug
> coverage. While there are wide variations among states, and even among
> insurance companies, officials of New York, Illinois and Wisconsin report
> big increases (The New York Times, page C1).
>
> Gasoline prices approached three-month highs amid reports of large
> declines in supplies and rebounding demand. March gasoline prices surged
> 3.55 cents to 92.25 cents a gallon at the New York Mercantile Exchange.
> The April contract soared 3.66 cents to 96.54 cents a gallon, while summer
> contracts also climbed (The "Commodities" feature of The Wall Street
> Journal, page C13).
>
> "An Ominous Upswing in News of Downturn." In this article Peter Carlson
> says, "After nine years of an unprecedented economic boom, unemployment is
> up, the stock market market is down and the media have responded to the
> bad news by going into an ecstatic frenzy of recession-mongering. ...Being
> an economics reporter during the longest peacetime expansion in American
> history is like being a weatherman in Southern California: You get tired
> of talking about sunny days and blue skies and highs of 72. ..."
> (Washington Post, page C1).
>
> DUE OUT TOMORROW: Major Work Stoppages in 2000
>
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