> BLS DAILY REPORT, THURSDAY, MARCH 8, 2001:
>
> Economic growth was "sluggish to modest" in most regions of the United
> States during January and February as the manufacturing sector generally
> continued its downward trend, the Federal Reserve Board says in its "beige
> book" report. The report, which provides a snapshot of economic activity
> in each of the Feds 12 districts, finds that only the Federal Reserve's
> Boston and Richmond district banks reported growth in the manufacturing
> sector. The slowing growth at firms and the rising number of layoffs
> across the nation has caused labor market tightness to ease slightly in
> more than half of the Fed's districts. Demand for manufacturing workers
> fell throughout the Midwest. Fed officials also reported that the demand
> for information technology specialists fell in Boston, and the demand for
> construction workers fell in Kansas City. In the Fed's New York district,
> however, a shortage of tradesmen has contributed to slow the pace of
> construction of new residential and commercial buildings. Retail sales
> rose modestly in January and February, but many district banks said the
> sales were driven by extensive discounting to clear out winter merchandise
> and reduce large inventories.(Daily Labor Report, page D-1; Washington
> Post, page E4; New York Times, page C4; Wall Street Journal, page A2).
>
> Chronic shortages of high-tech and other skilled workers are starting to
> ease in many parts of the country as layoffs rise and job-hopping abates,
> a Federal Reserve survey found. The findings could mean unemployment,
> which edged up to 4.2% in January but remained near a 30-year low, could
> rise further. February's unemployment rate will be released tomorrow. The
> Fed report, known as the "beige book," suggests demand has eased, mostly
> for the best-paid workers--those in high-tech, Internet, manufacturing,
> and construction jobs--while demand for entry-level, clerical and health
> workers has remained strong (Wall Street Journal, page A2).
>
> The rush started in October, with layoff announcements calculated to
> bolster lagging share prices in the midst of a stock crisis that is now in
> its sixth month. The job cuts were intended to demonstrate corporate
> fortitude, but many economists claim they were exaggerated and have
> collectively damaged the U.S. economy. "These announcements are having a
> psychological effect on consumers, who increasingly think the economy is
> going to unravel," says a senior economist specializing in consumer
> confidence at Economy.com, a research firm based in West Chester, Pa.
> "And it can unravel if consumers spend less because retail sales are 60
> percent of the economy." The reality is that December was the worst
> single month for mass layoffs in the 6 consecutive years that the
> Department of Labor has been recording them, with 2,677 mass layoffs
> affecting 326,743 people. The preceding month was the worst November
> recorded and the eighth worst month on record, with 1,697 mass layoff
> events affecting 216,514 people. But the January numbers were
> typical--particularly for a month that usually has the year's heaviest
> layoffs--with 1,522 mass layoff events affecting 200,343 workers. Senior
> economist Lewis Siegel, who compiles the mass layoff report for the Labor
> Department, says many layoffs included retired workers who weren't
> replaced, rather than workers who suddenly left their families without a
> paycheck. Siegel and many other economists say the news media are partly
> to blame for the drop in consumer confidence because they haven't been
> more skeptical of corporate motives and layoff announcements (Omaha
> World-Herald Online Edition, March 8).
>
> Data compiled by the Bureau of National Affairs in the first 10 weeks of
> 2001 show that the weighted average first-year wage increase in newly
> negotiated contracts is 4 percent, compared with 3.5 percent in the
> comparable period of 2000. The manufacturing industry weighted average
> increase is 3.5 percent, while nonmanufacturing agreements, excluding
> construction contracts, show a weighted average increase of 4.4 percent
> (Daily Labor Report, page D-3).
>
> The vast majority of American employers say "quality of care" is "very
> important" when they choose health insurance plans for their workers, but
> more than two-thirds of employers do not routinely receive reports from
> their insurers on the care employees are receiving, according to a
> national survey made by Watson Wyatt, a Washington, D.C. based employee
> benefits consulting firm. Insurance premiums for those surveyed rose by
> an average of 10.3 percent and pharmaceutical costs by an average of 14.6
> percent last year. Many employers are content to buy health insurance "in
> as-is-condition," says the consulting firm, because they don't think they
> can do much better.. Seventy-one percent of the employers surveyed have
> responded to rising health-care costs by increasing employee premiums; 86
> percent are at least moderately satisfied with their HMO plans (93 percent
> for non-HMOs); 55 percent say they intend to improve online health care
> services for employees; and 76 percent intend to continue selecting their
> employees' health plans -- rather than give the choice, and the money, to
> workers to pick their own ( Washington Post, page E2).
>
> After a decade long experiment with managed care, the nation's health
> system is no better at controlling medical costs -- and may be even worse,
> according to the president of the Center for Studying Health System
> Change, which studies health economics in 12 cities. Doctors, hospitals,
> and insurers are competing to provide the latest procedure or technology,
> driving up costs and demand (USA Today, page 3B).
>
> "As Americans brace for the first recession of the 21st century," says
> pollsters Peter Hart and Robert Teeter, who conducted a survey of the Wall
> Street Journal/NBC News poll of 2,024 Americans, "they feel quite
> differently than they did going into the recessions of the past 50 years.
> The public is less afraid of unemployment and job layoffs than it is of
> energy costs and their comcomitant effect on inflation or the decline of
> the stock market." More than one-third of Americans in the survey rank
> energy prices as the most important economic issue facing the country,
> while only 11 percent cite unemployment. By contrast, when recession
> fears surfaced in early 1992, almost half of the public in this poll cited
> unemployment as the nation's major economic issue. Results of the poll
> that are published in The Wall Street Journal on page A14 show the
> personal economic situation of adults in the survey by income and by
> marital status and include "in good shape/able to save for the future" and
> "in serious financial trouble".
>
> DUE OUT TOMORROW: "The Employment Situation, February 2001".
>
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